SYDNEY - [AAP] HOW MUCH DID THE BIG BANKS MAKE?

Commonwealth Bank (ASX: CBA), Westpac (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank (ASX: NAB) made a combined total of $31.5 million in profits in the 2017 financial year, up 6.4 per cent on 2016.

WHO MADE THE MOST?

Unsurprisingly, it was CBA--Australia's largest listed company--that topped the list with an eighth straight annual record of $9.88 billion in cash profit. Westpac was next with $8.06 billion, followed by ANZ's $6.94 billion and NAB's $6.64 billion.

WHERE DID THE GROWTH COME FROM?

Mortgages were again important for all four, with loan books growing and rate hikes for interest-only and investor loans helping offset pressures from funding costs that are rising along with overseas interest rates.

WHAT ABOUT THE BANK TAX?

The federal government's bank levy came into force on July 1--too late to affect CBA, which operates on a different financial calendar to its rivals. Westpac said its liability was a pre-tax $95 million, while NAB reported a $94 million income hit, and ANZ $86 million.

WHAT NEXT?

The benefit of those higher interest-only mortgage rates could fade as more borrowers switch to cheaper principal-and-interest loans. The scrapping of ATM fees will be another dent in the banks' profitability. The banks are likely to focus on cost reduction, and NAB has already flagged 4,000 job cuts and a minimum $500 million restructuring impairment.

IS THIS THE END FOR THE ERA OF RECORD PROFITS?

Not necessarily. KPMG Australia head of banking Ian Pollari noted "the majors have been adept at managing a number of headwinds". House price growth may slow but few are tipping big falls, which suggests that home loans will continue to be a winner even with stricter lending criteria as a result of regulation.

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