Bank profits near boom-time levels

Profits of major banks are almost back to the levels experienced prior to the onset of the global financial crisis in September 2008, the latest overview of the industry published by the Australian Prudential Regulation Authority shows.

The major banks earned a return on assets of 1.1 per cent in the March 2011, and an ROA of 1.0 per cent over the year to March.

The banks earned a return on equity of 18.1 per cent in the March 2011 quarter and an ROE of 16.1 per cent in the year to March.

Major banks' profits may have improved, on an ROA and ROE basis, in the June 2011 quarter if the full-year profit of Commonwealth Bank and the third-quarter trading updates of ANZ, NAB and Westpac are any guide.

APRA data shows that profits for the major banks measured by return on assets exceeded 1.0 per cent in most quarters in the four years preceding the 2008 crunch. Profits on an ROA basis touched 1.2 per cent in a couple of the quarters.