Australian Banks are strong and profitable

Australian banks have suffered little over the recent Wall street financial crisis and are enjoying record profits. So according to Mr Mortgage any Bank in Australia has no excuse for increasing their margins as the Reserve Bank of Australia reduces the official rates as it is expected to do over the next few months.

The fact is that mortgage profit margins have been reduced by over 2% since 1997 when they felt the effects of competition from non mortgage lenders and the army of mortgage brokers that used these products.

It is the non-bank mortgage lenders who are having a tough time getting competitive funds right now, and the banks are seeing their opportunity to move their margins higher in the wake of this reduced competition.

Official figures show the profit margin for the major banks was 54.8 per cent in the March quarter, resulting in $1 profit for every $2 in interest and fee income they charged. 

When rates were lifted recently the Commonwealth, the National Australia Bank [NAB], the ANZ and Westpac all lifted their mortgage rates by more than the Reserve Bank official cash rate.  

Also the official figures released yesterday by the Australian Prudential Regulatory Authority show that the interest income of the four major banks from loans was rising by substantially more than the interest they were paying to depositors and the wholesale markets. 

Rising interest rates and increased lending through larger loan sizes enabled the banks to raise their interest income in the quarter by $7.2 billion, compared with a year ago, to a record of $31.9 billion. 

Interest costs were up by $6.3 billion in the same period, with net interest income moving ahead by 12.9 per cent to $8.3 billion. 

So if your bank is charging you too much interest on your mortgage you should visit Mr Mortgage and get a mortgage quote