The net profit after tax for all banks in Australia was A$34.2 billion for the year ending June 2017, an increase of $6.5 billion (or 24 per cent) on 2016, the banking regulator APRA divulged yesterday.The return on equity for all ADIs was 12.0 per cent over the year to June 2017, compared with 10.3 per cent for the year ending June 2016.The profit stability story in Australian banking is static amid the cacophony stirred up by the anti-money laundering allegations and close watch on Commonwealth Bank.Banking analysts are cautioning investors about the near-term performance of financial services stocks as the regulatory focus on the sector intensifies.Banks absorbed the biggest hits in ASX trading on Tuesday led by Macquarie Group and CBA, with the latter down 95 cents or 1.24 per cent to close at $75.73.The bank sector was once again the worst performer across the market after North Korea launched a missile over Hokkaido Island in northern Japan.CLSA analyst Brian Johnson said the uncertainty in global markets sparked by the North Korean aggression would likely continue to weigh on domestic bank stocks for some time."The four major banks account for a much larger slice of the ASX index compared to other bourses, so they usually take a disproportionate hit when unusual events such as missile strikes spook investors," he said."The geo-political uncertainty in Asia compounds the ongoing concern over what the AUSTRAC legal action against CBA means for the local banking industry as a whole."Johnson said the biggest concern for investors in relation to bank stocks was whether CBA became so spooked by negative public sentiment that it would not be prepared to reprice housing loans when funding pressure required it to be done."The market is watching to see how the CBA reacts," he said."As Australia's largest home lender its pricing decisions are likely to have big implications for other lenders." Macquarie Group's share price was also pummelled, losing $1.86 or 2.1 per cent amid fears that it may be forced to take a write-down on US energy assets affected by Cyclone Harvey.The natural disaster wreaking havoc in southern Texas has damaged energy infrastructure throughout the state and there is some concern that Macquarie's US energy trading business may be exposed in some way.Macquarie also has wide-ranging business activities in Japan, including the financial services, infrastructure and energy sectors.The weak investment profile of banks appears to be an international theme, with a string of European institutions including Deutsche Bank, Royal Bank of Scotland, Barclays, Standard Chartered, ING Bank NV and UBS Group, all underperforming their respective national indices in overnight trading.Most of the difference in APRA's stocktake on industry profits centres on National Australia Bank and its whopping loss in the 2016 financial year over its troubled UK subsidiary Clydesdale Bank.Amid the introspection on the most controversial matters around the industry in Australia (with Commonwealth Bank in the frame) the recovery in the underlying consistency of the sector's profits take stage in this quarterly data set.The return on assets