Foreign bank branches report a stellar 2007

2007 was a cracking year for foreign banks in Australia that operate through branches.

The 31 foreign banks reported an aggregate net profit of $722 million in the year to December 2007, up from $304 million in 2006.

APRA estimated their combined profit margin for the year at 18.3 per cent, up from 10.8 per cent the year before.

Loans by foreign bank branches increased by 10 per cent over the year to $81 billion, a rate of growth that was slightly lower than for the banking system last year.

Operating income surged 41 per cent to $3.9 billion while net-interest income increased 67 per cent to $1.67 billion in 2007.

There's not much visibility of the earnings of this segment of the banking industry and so the quarterly statistics on bank performance published by the Australian Prudential Regulation Authority are the only real window into how they are tracking.

APRA published data for the full year to December 2007 yesterday in periodic publication Quarterly Banking Statistics.