The second worst ever loss for an Australian bank played the lead in the 27 per cent slump in sector profits for the year to June 2016.APRA's whole of industry quarterly snapshot on the sector shows aggregate Australian banking industry profits were A$27.7 billion over the year to June 2016,  down from $38.1 billion in 2015.A NAB loss of $1.7 billion, reported in the March 2016 quarter, is the cornerstone of the bad news.As a rule, it's the bad charge that generates a profit slump in banking, but that explains only $1.5 billion of the reduced profits in Australian banking.Personnel costs, explained in a related article today, are one component of the industry's expense problem.APRA put the industry profit margin in 2016 at 26.5 per cent, a measure restrained by the NAB loss. Most quarters this profit margin hovers around 32 per cent to 33 per cent, and has clung around that level since 2013.The industry return on assets, in a blighted year, was 0.6 per cent down from 0.9 per cent in 2015.In the credit boom years ROAs reached 1.1 per cent in quarters during 2004 and 2006. During this period a one per cent ROA seemed a norm.As our accompanying chart todays shows, return on risk weighted assets (a cornerstone of a highly profitable or reliably profitable Australian banking industry) looks far away.