IMO banks are fine atm. Even with little to no growth there is still profit to be made with current loan portfolios. Especially given the housing boom in Mel and Syd.
Having little to no growth while not good doesn't deem that the banks cant be profitable.
Banks lend money and get repaid more than what was borrowed = profit.
Its also a lot harder to walk away from loan or finance debt here that it is in the US. Declaring bankruptcy here will leave you struggling to get a loan a lot longer than the 8 years or so that they place you on the black list. Credit history with banks isnt cleared and all good and well after 8 years as it may appear.
The RC has also ensured tighter lending controls and also more rigorous valuations before lending money. This will lead to robust portfolios long term and greater profit when interest rates start to rise. No correction coming IMO.
NAB, Banks and Looming Mortgage Crisis, page-20
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