There's more to bank profits debate than home loans

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Comment: There's more to bank profits debate than home loans

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The Prime Minister says the major banks are "profiteering". The shadow treasurer is canvasing an increase in the major $6 billion bank "levy". The Australian Competition and Consumer Commission wants to hold yet another major inquiry into a sector that has experienced continual inquiry.banks’ decisions not to fully pass on last week’s 25 basis point cutThe backlash is predictable. It happens every time the banks’ interest rate decisions diverge from changes to the cash rate.

To attract those deposits, retail deposits, in particular, the banks have to offer depositors some level of return. As the cash rate has steadily fallen to last week’s 0.75 per cent, deposits rates have tracked down too. If the banks were "profiteering" it would be reflected in their profitability and, more particularly, their net interest margins.remediation costs to customers flowing from the financial services royal commission.Their net interest margins, however, provide a clearer picture of the relationship between the interest generated from their loans and the interest paid out to the banks’ own lenders, including depositors.

In the first half major bank cash earnings were down about 4 per cent and the average return on equity, not that long ago in the high-teens, was around 12 per cent. It is important that the banks are strongly profitable, not just because they are a key source of dividend income, directly or indirectly, for millions of Australians but because it secures access to capital.

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they need to have some way to pay multi-million dollar bonuses for destroying the economy.

Not for people with ridiculous mortgages, how did our government let it get so out of control

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