The big four banks have reaped a collective annual profit of $22.8 billion, the same as winning the Melbourne Cup more than 6,300 times over.
But they need to streamline their businesses if they are to continue growing in a slowing economy, analysts say.
The major banks posted a lower combined net profit than the previous year's $24 billion, due to falls in earnings at National Australia Bank (NAB) and Westpac.
NAB was hit by a spike in costs from its struggling United Kingdom operations, while Westpac's tax issues arising from its takeover of St George affected its bottom line.
But the Commonwealth Bank's record $7.09 billion net profit in the year to June 30, and ANZ's $5.66 billion profit partly offset those falls.
Combined full year cash profits were $25.2 billion, up four per cent from the previous year, the slowest rate of growth for some time.
All of that growth came in the first half of the banks' fiscal years, illustrating the worsening conditions banks are now facing, PricewaterhouseCooper's financial services leader Hugh Harley said.
"Despite the sector's obvious strengths in capital and efficiency, it would be foolhardy for anyone to dismiss or underestimate the challenges facing our banks," he said.
Those challenges come mainly from slowing economic growth, increasing regulatory requirements and rising loan impairments, KPMG's Asia Pacific head of banking Andrew Dickinson said.
"They must make structural changes to improve productivity," he said.
That could include restructuring of branch networks, simplifying their processes and investing in technology and new products, according to KPMG.
"The market is getting even tougher, they must do more than evolve, the quantum and pace of change needs to significantly increase," KPMG's head of financial services Michelle Hinchliffe added.
But the Australian Bankers' Association (ABA) said the big four continued to perform well given the global economic conditions, and that was good news for the local economy.
"It is important that banks remain stable, dependable and profitable so they can keep our money safe and continue to support growth in our economy," ABA chief executive Steven Munchenberg said.