MB Fund Podcast: Why are Australian Banks so profitable? w/ Matthew Johnson

In today’s investment webinar MB Fund’s Head of Investments Damien Klassen, and Senior FInancial Advisor Mark Monteiro are joined by Matthew Johnson, the Principal of Signal Macro to discuss our thoughts on why Australian Banks are so profitable compared to International Banks.

Can’t make it to the live series?  Catch up on the content via Podcasts or our recorded Videos.

Take us on your daily commute! Podcasts are available on iTunes and all major Android Podcast Platforms for Nucleus Investment Insights.


  • 00:00 Introduction and background on Matt
  • 03:20 Bank funding & CLF
  • 09:30 Why are Australian banks so profitable?
  • 18:10 Are these changes a signal that govt will stop pushing house prices?
  • New Zealand housing market
  • 29:30 Will Aus follow suit and raise rates?
  • 35:10 Wage growth 36:50 USD vs AUD
  • 41:05 Worst case scenarios for the big 4?
  • 45:15 TFF
  • 46:20 Bond rates
  • 48:00 The RBA following other global banks
  • 52:45 Macro look at US economy
  • 55:55 Europe and their ties to China



Damien Klassen is Head of Investments at the MacroBusiness Fund, which is powered by Nucleus Wealth.


The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Past performance is not an indication of future performance. Nucleus Wealth Management is a Corporate Authorised Representative of Nucleus Advice Pty Ltd – AFSL 515796.


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  1. C'est de la folieMEMBER

    Why are Australian Banks so profitable?

    A. Because they are Australian
    B. Because they represent the worlds only banking sector going 65% mortgages for its lending
    C Because they lend to the worlds most heavily indebted people (or nearly)
    D Because they lend to about the worlds most economically uncompetitive people (deploying the worlds most expensive land, energy and internet)
    E. Because they lend in a legislative world legislative on by a polity they have pawned
    F. Because they lend in a social context reported on by the worlds most pawned media
    G. Because they are the worlds most brilliant and most innovative funds managers
    H. Because they are overseen by APRA
    I. Because they have Anna Bligh representing their interests
    J Because its your money Ralph
    K Because the worlds best Central Bank makes sure their window is always open

  2. Jumping jack flash

    Its really quite simple.

    Around 2 trillion dollars of outstanding mortgage debt, even at these low, low interest rates represents an avalanche of interest money that banks are set to receive each and every year that figure remains outstanding. While it may be shrinking, it certainly isn’t shrinking fast enough to make a huge difference to that interest bill, and that’s not even counting the money the government hands to the banks to supplement their interest take so they can keep their rates low.

    And to think we quibble over spending few billion here and a few billion there! All of that needs to be put into perspective of the pile of debt we all own.

    There’s no problems though, our houses are valued at over 9 trillion now, so 2 trillion outstanding is still well within overall LVR thresholds. In fact its looking absolutely golden.
    The only problem going forward is whether everyone is going to remain eligible for the amounts of debt to take it up to the next leg. To maintain the “doubles every 7 years” rule, we need to reach 10 million median price by 2050. What will need to happen for anyone to be eligible for that amount of debt?

  3. Your last sentence is a good point. It becomes an exponential increase which then puts it out of the relative world.