Stellar profits for Australian banking sector

Australia's banking industry is flying along. Over the year to September 2014, banks recorded a combined net profit of A$33.5 billion, an increase of $3.6 billion, or 12 per cent, on the year to September 2013.

The Australian Prudential Regulation Authority's Quarterly Authorised Deposit taking Institution Performance publication for the September 2014 quarter provides the definitive snapshot of a sector now only days away from hearing the findings of the Financial System Inquiry.

Industry profits on a relative basis are much better than one year ago, with return on equity at 14.6 per cent, up from 13.9 per cent in 2013.

APRA put the industry "profit margin" at a record 32.6 per cent, up from 31 per cent in 2013.

Total assets of ADIs were $4.2 trillion, an increase of $3450 billion (or nine per cent).

 The total capital base of ADIs was $210.4 billion at 30 September 2014 and risk-weighted assets were $1.7 trillion at that date.

The capital adequacy ratio for all ADIs was 12.4 per cent, APRA said. This is about two percentage points more than in the era before the GFC, with the sector expanding its capital base by about A$70 billion, or 50 per cent since then.

Impaired assets and past due items were $29.1 billion, a decrease of $7.4 billion (or 20 per cent) over the year.