Yet weakness in Australian economy’s consumer-exposed sectors and the impact of natural disasters may push bad debts up anew.
Big profits are expected from major banks this week but investors are more focussed on how lenders plan to grow revenue when consumers and businesses are borrowing less.
Analysts forecast a cash profit of around $6.9 billion for Commonwealth Bank of Australia (CBA) when it posts its full year results on Wednesday.
That would be an improvement of 13 per cent on CBA's $6.101 billion cash profit in the previous financial year.
Rivals National Australia Bank, Westpac and ANZ will be updating the market with third quarter results.
But the large profits, which have grown mainly because bad debts have declined after surging during the global financial crisis, may well be a peak for the time being.
Now, weakness in consumer-exposed sectors of the economy, plus the impact of natural disasters, may see bad debts increase again.
View the full story in Sydney Morning Herald.
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