The industry rhetoric of efficiency and productivity stands exposed by APRA’s latest Quarterly ADI Performance statistics.
Personnel costs at the major banks increased by a whopping 17 per cent over the year to December 2021.
Across the industry, personnel costs lifted 14 per cent over last year.
As a proportion of industry assets, the sector’s total costs are almost as low as they have ever been, the quarterly APRA data shows.
For all Australian ADIs, the cost-to-income ratio declined to 54.2 per cent for the year ended March 2022, from 55.0 per cent for the prior year, APRA said.
The improved ratio was largely due to improvements to operating income outpacing operating expenses incurred over the year.
The aggregate net profit of all banks increased by 30.3 per cent or A$8.9 billion for the year ended March 2022.
The increase was largely driven by a material reduction (down $6.0 billion) in charges for bad or doubtful debts. ADIs have continued to release provisions raised during the earlier stages of the pandemic, due to the continued resilience in the economic recovery.
The industry return on equity increased by 2.2 percentage points to 10.7 per cent over the same period.
Deposit liabilities grew in the March 2022 quarter, “increasing to a new historical high level” of $3.6 trillion (up 1.0 per cent).
Total assets increased by 2.4 per cent over the March quarter, to $5.8 trillion.
This was driven by increases of 2.0 per cent in other assets and in gross loans and advances (up $73.1 billion) to $3.8 trillion, “reflecting the strength of housing lending and business credit growth”.