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Big banks make record profit of $28.6b

Australia’s big four banks have made a record total profit of $28.6 billion as property prices continued to surge.

The combined cash earnings of the Commonwealth Bank, Westpac, ANZ and NAB were up 5.7 per cent on the results for 2012/13.

They were even stronger than market expectations of $20 billion, cementing Australia as the home of one of the world’s most successful financial sectors.

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Westpac on Monday joined the Commonwealth Bank and ANZ in announcing a record full year profit.

NAB was the only major bank to post a reduced profit but it is exiting the troubled UK banking sector.

Professional services firm KPMG said strong property prices, historically low loan impairments and improved wholesale funding conditions had helped drive the higher collective returns of the big banks.

“The 2014 full year saw the majors sustain their current level of high returns, underpinned by robust growth in housing credit and wealth management, further declines in bad and doubtful debt charges, lower wholesale funding costs and continued cost discipline,” the group’s national head of banking Ian Pollari said in a statement.

Housing credit is growing at an annual pace of 7.2 per cent, led by strong demand from investors.

But the banks could face new regulatory hurdles.

Former Commonwealth Bank boss David Murray is due to release his final report later this month into the post GFC banking sector.

KPMG said possible recommendations on things like impairment charges could affect the banking sector.

What the big four banks made

CBA $8.68b, up 12 per cent from $7.82b in 2012/13

ANZ $7.12bn, up 10 per cent from $6.49bn

NAB $5.18bn, down 10 per cent from $5.75b

Westpac $7.63bn, up 8 per cent from $7.06b

(CBA’s financial year ends on June 30 while the other major banks have a reporting year finishing in September).

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