From Clime Investment Management: During the last week, as full year results were delivered, we received a glimpse of how dependent the Australian economy and...

Tom McKay

From Clime Investment Management: During the last week, as full year results were delivered, we received a glimpse of how dependent the Australian economy and our equity market (and therefore our retirement savings), is upon the health of our large listed banks. The results were solid with earnings between 8% and 10% higher than last year. Dividends lifted on higher payout ratios. However, the key measure of profitability, return on equity showed that banks are less profitable than they were prior to the Global Financial Crisis (GFC). Whilst all banks presented their capital ratios as being strong, the level of provisioning (or reserving for problem loans), has dropped towards historic lows. Our banks are indeed strong but not as strong as they should be given the uncertain global economic climate and the emerging challenges for the Australian economy. Read the full article: (VIEW LINK)


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