Did you know that the Big Four Australian banks collectively rake in $83 million in profits every single day? That's right – these aren't yearly numbers. Just think, every time you sit down with your family for the evening meal, the big, greedy banks have pulled in enough money to buy a small island for each day of the year. How are the Big Four turning over such enormous numbers? According to Kevin Young, president of the Property Club (the country's biggest independent property group) it's all down to a lack of competition.
Greed is not good
During the last financial year, Westpac, the Commonwealth Bank, ANZ and NAB had a combined net profit of well over $30 billion.
During the last financial year, Westpac, the Commonwealth Bank, ANZ and NAB had a combined net profit of well over $30 billion, which makes them by far the most profitable in the developed world – even more so than those in the UK and United States. Mr Young states that his organisation have long been calling for a royal commission into the big banks because of this perceived lack of competition, as well as their accountability. Indeed, the Property Club believe that this perfect storm allows the Big Four to best serve their shareholders in the form of enormous profits, at the same time squeezing the customer with their record-high home loan interest rates.
"The Reserve Bank (RBA) has failed to force the big four banks to offer more competitive interest rates and has presided over interest rates in Australia which are now much higher than the USA and the UK, for example, even though their relative economies are now stronger than ours," said Mr Young.
"Australians have every right to demand greater accountability from the Reserve Bank when you consider that its head is paid over $1 million a year which is around three times the annual salary of the head of the Federal Reserve in the USA."
Fight the power
Over the last century or so, there have been over 100 royal commissions launched by the Federal government, on topics as tobacco, marketing, insurance sales tactics and sugar use. So, will banking be the next sector on that list?
It perhaps should be, though we wouldn't hold our breath. This sort of thing has been going on too long, so sock it to the big banks by joining CAPE. As a customer-owned bank, all of our profits filter back down to you in the shape of low interest rates and other perks – contact us to find out more about what we do.