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The banking sector has become more profitable and is lending relatively greater amounts of money, according to new APRA data.
Australia’s authorised deposit-taking institutions made a collective net profit of $32.3 billion in 2013/2014, which was up 13.5 per cent on the previous year.
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Their net loans-to-deposits ratio also increased, from 111 per cent to 111.7 per cent.
Domestic housing loans grew 8.6 per cent to $1.2 trillion. At the end of the financial year, there were 5.1 million housing loans outstanding with an average balance of $237,000.
Commercial property exposures climbed 7.9 per cent to $230.5 billion.
The authorised deposit-taking institutions ended 2013/2014 with $4 trillion of assets, an increase of 5.5 per cent, with the major banks holding 78.2 per cent of those assets.
Impaired assets and past-due items fell 16 per cent to $32.1 billion.
Meanwhile, research company IBISWorld has said that falling barriers to entry in the banking sector could attract new players.
“While banks remain the dominant force behind consumer and business lending, Coles’ impending foray into personal loans could be indicative of things to come as supermarkets, airlines and department stores attempt to muscle in on the market,” IBISWorld said.
Companies that operate across multiple sectors can provide financial lending products if they become an authorised deposit-taking institution and obtain a licence from APRA.
“Improving technology, centralised contact points and the reduced use of branches are the main factors driving new companies into the uncharted waters of retail banking,” IBISWorld said.
[Related: Mortgage books keep growing]
