Bank revenue is to improve in 2012-13, supported by a stabilised economy and consumer confidence
Melbourne, Australia (PRWEB) August 04, 2012
The Australian banking system has remained solid during a time when other global banking markets have faltered considerably. National and Regional Commercial Banks industry revenue is forecast to decline an annualised 0.7% over the five years through 2012-13 to reach $208.6 billion. According to IBISWorld analyst Ee Jen Lee, “Australia's banks were shielded from spiralling global funding costs by the Federal Government's wholesale funding guarantee”. With house prices and the economy remaining relatively strong, driven by economic stimulus and continued international demand for commodities, Australian banks faced comparatively low levels of bad debts, offsetting much of the increase in loan loss provisions with slightly higher interest margins. Although loan loss provision has fallen from its peak, increasing wholesale funding costs will put pressure on profit margins.
National and Regional Commercial Banks industry revenue is expected to rise by 5.6% in 2012-13. Lee adds, “the uncertainty surrounding the global economy is curtailing growth and the fall in housing prices is compounding this effect”. The turbulent economic environment has adversely affected business and consumer confidence. Commercial lending is stagnating and home loan growth is slowing. From 2013-14, banks will likely begin to experience solid and improving growth, as a stabilised economy will reinvigorate business and consumer confidence. Although competition will erode profit margins, banks are expected to continue to dominate the market with the four major banks retaining significant control. However, the gradual contraction of the retail and manufacturing sectors is expected to impede revenue growth. Revenue is forecast to grow over the five years to 2017-18.
The National and Regional Commercial Banks industry displays a high level of concentration. The major players in the industry are Commonwealth Bank of Australia, Westpac Banking Corporation, National Australia Bank Limited, and Australia and New Zealand Banking Group Limited.
For more information, visit IBISWorld’s National and Regional Commercial Banks report in Australia industry page.
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IBISWorld industry Report Key Topics
Enterprises in this industry are recognised as Australian-owned banks and Australian operational banks engaged in banking activities. National and regional banks generate revenue through investments, interest income on loans, advances, fees and commission income.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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