MARKETS SPECTATOR: Charting ways four-ward

Research by PricewaterhouseCoopers shows Australia’s four major banks are flying, delivering combined underlying cash earnings of $13.4 billion for the first half, up 7.3 per cent half on half.

PwC Australia’s Banking leader Stuart Scoular said tight cost management, a focus on productivity and low bad debt expenses overcame the Australian economy’s weak credit growth to deliver the record result.

But Scoular said the outlook remained challenging with hurdles including the margin effect of Tuesday's Reserve Bank's interest rate cut and intense competition in some areas.

The PwC Major Banks analysis found for the year to March deposits grew by $115 billion while lending growth amounted to $87 billion. In the six months to March business credit fell 0.7 per cent, or about $5 billion, and business deposits shrunk 0.4 per cent, or by $2 billion.

The following eight charts show how the banks have achieved this growth and also measure some of the factors that have been, vainly, working against them, such as stagnant credit growth and flat margins.