The shocking costs in Australian banking are out of control.
Look at the personnel costs, which are flying high.
Across the industry, the ratio of personnel to operating expenses over the year to September 2022 was 55.8 per cent.
The days of improving and even half credible cost to income ratios – in the high 40 per cent range – are long gone.
The cost to income ratio of all Australian banks was 52.6 per cent over the year to September, and it is not long since one quarter landed in the 60s.
The personnel line at major banks over the year was A$33 billion, up 10 per cent in one year, APRA’s quarterly ADI data shows.
At mutual banks and credit unions the heft of the increase was lower, but the same direction over the last year. Over two years the staff line is up 40 per cent for mutual ADIs.
These trends are set to continue and worsen before they resolve.