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Big four bank profits: What they're paying you

·3-min read
Logos of the big four banks with Australian cash
Thig big four banks all reported big profits in the first half (Source: Getty)

The big four banks all posted big profits for the first half of 2021 from September 2020 to March 2021.

For many, that’s good news; because when the banks are doing well, so are the investors.

In the six months, the Commonwealth Bank posted a net profit of $4.87 billion, ANZ gained $2.94 billion, Westpac recorded profits of $3.44 billion and NAB profits rose $3.2 billion.

The billion-dollar results indicate the major banks fared well amid a pandemic that brought on uncertainty to millions of Australian businesses.

But what do the profits actually mean for those who invest in or bank with these behemoths?

If you’re an investor...

Investors can rejoice as each of the big four announced it was boosting their dividend payments. With COVID uncertainty last year the banks put their focus on customers so paying dividends wasn’t a top priority, but now it’s paying off.

Those with a holding in CBA can expect a payout of $1.50 per share, which is up 53 per cent from the second half of 2020. So, if you own 100 CBA shares, you’ll be getting a nice even payout of $150.

Those with Westpac can expect a dividend of 58 cents per share, which is up 87 per cent from the end of 2020. Those who own 100 Westpac shares will see returns of $58.

NAB is offering 60 cents per share to its investors. This is the biggest increase and double last years’ dividend.

Finally, ANZ will pay 70 cents per share, which has also doubled from the end of 2020. Investors will get $70 per 100 shares.

If you have, or want, a home loan...

Home loans have been a major part of each of the big banks' results so far this year amid a booming property market that's seeing high demand for loans.

The competition between the banks has been heating up in this area due to the high demand, triggering a major focus on reducing approval processing times.

CBA owns just over a quarter of the country’s home loans. The bank deferred the home loan repayments of 158,000 customers when COVID hit, with 87 per cent already resuming regular payments.

“Home lending has continued to grow strongly during the period,” CBA CEO Matt Comyn said.

“We’ve had a big focus on just operational excellence and making sure we’re serving our customers’ day-to-day banking needs.”

ANZ saw a boom in home loan applications, now making it the third largest lender in the country, providing an additional 92,000 loans in the first half of the year.

ANZ CEO Shayne Elliott credited the bank's advertising campaign featuring David Hasselhoff as a big contributing factor to the boom.

Westpac saw a surge in new lending, up 49 per cent over the past year. Westpac CEO Peter King said the past 12 months has been astounding.

“While most interest has been from owner occupiers, investors are beginning to return to the market, with investor lending up 31 per cent over the four months to February,” King said.

“While we expect continued increases in home prices, as the supply of houses for sale increases, the rate of house price growth will likely moderate.”

NAB holds around $206 billion in home lending but said the bank is focused more on business lending to help small and medium sized businesses.

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