Bank of Australia commercial banks are expected to record record their highest quarterly profit in more than five years as the economy recovers.
Commercial banks are on course to record their biggest quarterly profit since 2007 as they continue to boost their commercial lending.
Commercial bank earnings rose 1.3 per cent to AUD$2.1 billion in the June quarter, according to the Reserve Bank of Queensland.
Commercial banks were expected to make a profit of AUD$1.1bn in the May quarter.
Commercial lenders will also be pleased to hear that bank lending will continue to rise, as they are also expected to continue to grow.
The commercial bank sector is expected to post its biggest quarterly rise since 2008.
Commercial lending is expected by the Reserve to grow by 2.6 per cent in 2017-18, according the Reserve.
Commercial loans to businesses will also grow by 3.3pc to $6.9 billion, according Bank of Melbourne’s chief economist, Paul Fletcher.
The bank will also post its strongest quarterly profit on record.
Commercial Bank of Perth chief executive Ian Gollings said commercial lending is growing at a much faster pace than the rest of the economy.
Commercial banking is booming in Australia, and I’m confident we will continue on that trajectory, he said.
Commercial Banks’ chief executive Andrew Colman said he is pleased that the economy is improving and that commercial lending was up at the same time.
Commercial credit in Australia has increased by an average of 7.5pc over the last three years, according data from the Australian Bureau of Statistics.
Commercial loan growth in Australia is expected at an average 3.5 per cent over the next five years.
Commercial commercial banking has seen an average annual growth rate of 3.2 per cent between 2014 and 2016, the Reserve said.
The Commercial Bank of New Zealand reported a 7.4 per cent rise in the quarter.
The Bank of England reported a 1.4 cent rise and Bank of America reported a 3.6 percent increase in the same period.