Australia’s Big Four banks have been given a vote of confidence from Bank for International Settlements, according to a report published by Fairfax, just days after Moody’s downgraded 15 global banks last week.
The report says the bank, known as the central bankers' bank, has classed Australia’s banks as the most profitable in the developed world for the second straight year followed by Canada and America.
According to Bank for International Settlements, ANZ Banking Group (ASX:ANZ), Commonwealth Bank of Australia (ASX:CBA), National Australia Bank Limited (ASX:NAB), Westpac Banking Corporation (ASX:WBC) recorded pre-tax profits equal to 1.19 per cent of their assets last year.
However, Bank for International Settlements has cautioned banks will need to adopt more aggressive cost management strategies than in the past since the new regulatory environment will put pressure on their profitability.
The warning comes as Westpac’s CEO Gail Kelly affirmed the bank is ready for changes to the funding environment, claiming Westpac has planned for greater downgrades, continued volatility, and markets being unavailable.
In the first half of the 2012 financial year Westpac reported a net profit of $3 billion.