The major banks will continue to rake in record profits despite a slowing economy and the risks posed by soaring property markets, ratings agency Moody's says.
Commonwealth Bank is expected to beat last year's $8.7 billion profit when it releases its results for 2014/15 on August 12, while its three rivals report to the market in October and November.
The latest study of the banking industry by Moody's highlights risks from a slowing economy, imbalances in the property market due to Sydney and Melbourne's rising prices and new capital requirements, but maintains the agency's positive outlook for the major lenders.
"Australian banks should retain their strong credit profiles against these potential challenges, as they continue to benefit from their entrenched market power and healthy balance sheets," Moody's senior credit officer Ilya Serov said.
The agency said the industry's structurally high profitability - the big four's collective profit totalled almost $29 billion in 2013/14 - is expected to persist.
They continue to enjoy strong pricing power due to the dominance of the big four, and their ability to pass on increasing funding costs to borrowers, Moody's said.
But the economy remains under pressure from falling resources investment, a weaker terms of trade and subdued business spending, it warned.
The banks are also exposed to the risks created by a recent spike in investment property lending, though new measures imposed by regulators to curb that activity should ease that pressure, Moody's said.
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