An examination of the profitability of Australian banks, focusing on profits generated from owner-occupier home loans. The report finds that Australian banks are highly profitable, extracting significant profits from home loans in particular. The report suggests that this high profitability disproportionately burdens homebuyers, who represent a small proportion of banks' overall business.

The analysis focuses on the "big four" banks: ANZ Bank, Commonwealth Bank of Australia, National Australia Bank, and Westpac Banking Corporation. It compares their performance against all Authorised Deposit-taking Institutions (ADIs), which includes all banks, credit unions, and building societies, examining interest income earned on a range of services to offer insights into the profitability of this specific segment of the banking business. 

Key findings

• The big four banks made $17.6 billion in profit from households with owner-occupier home loans in 2023-24.
• Owner-occupied housing loans represent 39.5% of the big four’s total profit, but just 24.6% of their total business.
• Over the life of an average 30-year loan, the bank will profit $200,880, equivalent to 35% of the average mortgage.
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