Profits a drag on credit quality

Ian Rogers and Shereel Patel
The external operating environment for banks continues to be uneasy, with company profits taking a turn for the worse.

Australian business's aggregate gross operating profits fell 1.8 per cent in the December 2014 quarter compared with the September quarter and are seven per cent less than a year ago, the Australian Bureau of Statistics said yesterday.

The seasonally adjusted estimate for company gross operating profits fell 0.2 per cent in the December quarter 2014. A fall of 5.9 per cent was noted compared to December 2013.

Profits fell in most industry sectors, but transport - often a warning of credit stress - bucked the trend and rose by close to ten per cent over one quarter, seasonally adjusted.