National and Regional Commercial Banks in Australia Industry Market Research Report Now Updated by IBISWorld

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The National and Regional Commercial Banks in Australia industry's overall profitability and that of individual players is remaining robust, in contrast to the catastrophic losses experienced elsewhere. For this reason, industry research firm IBISWorld has updated its report on the National and Regional Commercial Banks industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

Bank revenue is set to improve, supported by a stabilised economy and consumer confidence

The National and Regional Commercial Banks in Australia industry has remained solid during a time when other global banking markets have faltered considerably. Despite industry revenue being forecast to fall to $187.7 billion in 2012-13, the majority of banks have remained profitable. Over the five years through 2012-13, industry revenue is expected to decline at a compound annual rate of 2.8%. Despite this, Australian banks are well capitalised. Although profit dropped in 2008-09 as margins slipped and revenue fell, the industry's overall profitability and that of individual players remained robust, in contrast to the catastrophic losses experienced elsewhere. 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, Australian banks faced comparatively low levels of bad debts. This was in part driven by economic stimulus and the continued international demand for commodities. Much of the increase in loan loss provisions was offset with slightly higher interest margins. According to IBISWorld industry analyst Andrei Ivanov, “although loan loss provision has fallen from its peak, increasing wholesale funding costs continue to put pressure on profit margins”.

Revenue is forecast to fall by 0.6% in 2012-13. “The low interest rate environment and stagnant demand for housing are compounding this effect”, says Ivanov. The turbulent economic environment has adversely affected business and consumer confidence. Commercial lending is stagnating and home loan growth is slowing. The National and Regional Commercial Banks industry displays a high level of concentration, with the Commonwealth Bank of Australia, Westpac Banking Corporation, National Australia Bank Limited, and Australia and New Zealand Banking Group Limited all accounting for a large market share. Competition could erode profit margins, with the four major banks expected to continue dominating the market.

Industry revenue is anticipated to grow as interest rates start climbing. A stabilised economy will reinvigorate business and consumer confidence. However, the gradual contraction of the retail and manufacturing sectors is expected to impede revenue growth.

For more information, visit IBISWorld’s National and Regional Commercial Banks report in Australia industry page.

Follow IBISWorld on Twitter:!/ibisworldau

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.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than ten locations worldwide. For more information, visit or call (03) 9655 3886.

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Gavin Smith
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