Big banks total half year profits crack $15 billion

As expected, the big 4 have totalled a profit of $15.7 billion for the first half of the year. They’re also set to rack up $792 million in extra interest over the next six months thanks to the recent home loan variable rate rises.

Big banks ANZ, NAB and Westpac announced their half year profits over the past two weeks, while the Commonwealth Bank released its results in February. Profits were up across the board, and home loan figures were strong, despite APRA recently enforcing tighter lending standards.

Big Bank half year profits 2017

Half Year Profit
ANZ$3.4 billion
NAB$3.29 billion
Westpac$4.17 billion
CommBank (released February 2017)$4.84 billion
Total$15.7 billion

The regulations targeted investor and interest-only loans, in the face of a competitive housing market, where young homebuyers are struggling to get a foot in the door and housing affordability is a hot issue.

RELATED: First home buyer struggle a reflection of wealth inequality says RBA Governor

In response, the major banks embarked on a round of out of cycle rate increases, mainly for investment and interest-only products. While ostensibly designed to discourage borrowers from these types of loans, the rate hikes have had the side effect of generating increased interest earnings for the banks.

At the beginning of May, Mozo reported that since the variable rate increases in late March the banks had earned roughly $100 million in extra interest thanks to the rate increases. If rates and property demand hold steady, the new interest rates could net the banks a combined $792 million in extra interest in another six months.

Extra interest earned by Big 4 after variable rate hikes

Extra interest in six months
ANZ$142.9 million
NAB$149.2 million
Westpac$203.6 million
CommBank (released February 2017)$297.3 million
Total$792.9 million

For borrowers, the rate hikes mean it’s more important than ever to review your home loan deal and make sure you’re getting the best value available. To help, make sure you check out our switch and save home loan calculator.