Regional banks post 'strong' operating profits
A fall in assets under management (AUM) of 3.9 per cent by Australia’s regional banks in 2008 has contributed to a decrease of 11.1 per cent in operating profit from wealth management activities for the year.
A performance survey by KPMG, entitled ‘Regional Banks 2008’, found this fall in wealth management profit was the major driver of the “relatively low growth” in non-interest income during the year.
Non-interest income for the regional banks — Bendigo and Adelaide Bank, Bank of Queensland, Elders Rural Bank (ERB), St George and Suncorp — increased by 3.1 per cent to $1.8 billion in 2008.
Overall, however, the survey found the regional banks posted an overall operating profit before tax increase of 4.8 per cent to $2.9 billion in 2008, and 17.2 per cent asset growth.
“This is a strong performance in light of current market conditions and when compared to the 24.6 per cent decrease in profit before tax experienced by the four major banks,” it said.
Deposit growth in 2008 demonstrated that the regional banks are “more than holding their own” against the four major banks, according to the survey.
All the regional banks grew their retail deposits base at a faster rate than last year, increasing by 16.9 per cent collectively in 2008, compared to the 16.4 per cent achieved by all Australian banks.
AUTHOR
Recommended for you
In this episode of Relative Return, host Maja Garaca Djurdjevic is joined by shadow treasurer Angus Taylor to discuss the current state of the financial advice sector, the economy, the housing affordability crisis and more.
In this episode of Relative Return, host Laura Dew speaks with Andrew Mitchell, director and senior portfolio manager at Ophir Asset Management, about why he loves working in fund management and the lessons he’s learnt in a decade of running a firm.
In this episode of Relative Return, host Laura Dew speaks with Blackwattle Investment Partners managing director and chief investment officer, Michael Skinner, about setting up an asset manager and what he looks for in an investment team.
In this special episode of Relative Return, Momentum Media’s Phil Tarrant and Jordan Coleman discuss the publishing house’s expansion into greater coverage of the wealth management space.
