Recent years have been some of the most lucrative in history for Australia’s lenders with the past year being the most profitable to date, as the country’s 'big four' lenders – Commonwealth Bank, National Australia Bank (NAB), ANZ and Westpac – posted an impressive combined A$43.71bn ($31.54bn) pre-tax profit (see chart one).
Sheltered by a healthy economy, the lenders tapped into the buoyant housing market. This is where the key to the success of Australian lenders lies. The big four were already reliant on the housing sector, but over the past seven years their holdings of housing loans doubled and the high margins that followed bolstered interest income (see chart two).
