Usually it’s nice to find something in which Australia leads the world. But when it’s our banks profits that are out ahead of the rest of the developed world, suddenly we all feel a bit duped.
A recent study by the Swiss based BIS organisation has revealed that the collective profits of Australia’s big four banks are likely to exceed $26 billion collectively, outpacing bank profits in all but the emerging economies in places like Brazil, Russia, India and China.
The study showed that Australian banks have lower costs, and enjoyed wider interest margins indicating more profitable lending. We suspect that much of this profit comes from overcharging and under delivering. Call Centres are being relocated offshore and small business operators are receiving even less face to face service from their banks.
Simultaneously, independent research conducted here in Australia shows that 50% of SMEs are ready to abandon their current financier in seeking equipment finance. When looking at the complacency of the major lenders, Mark O’Donoghue see things this way; “I suspect that too many banks and finance companies are too stuck in their ways to do anything more than simply mine the profits that come off small business while delivery little in the way of service in return.”
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