Amid the fashionable talk about AI in banking, and in the context of traditional talk about cos to income ratios, far too little time is spent considering the unbelievable personnel costs line.
Quarterly APRA data yesterday shows the four major banks in Australia ran up combined staff costs of $24.3 billion over the year to December 2023.
Personnel costs as a proportion of total operating costs at December 2023 were 62 per cent, for the major banks.
Five years ago this ratio was around 55 per cent.
Banks can no longer blame Covid, or remediation (which big banks by and large contend they are on top of) or even hardship.
They can only blame themselves, and forget about much merit in any remaining claims to efficiency or productivity in banking.