FEAR & GREED | Business News Q+A: Why the big banks are spending so much money
Nov 10, 2025
Noelle Williams, PwC Australia's Banking and Capital Markets Leader, offers insights into the recent performance of Australia’s major banks. She discusses how the sector is stable yet strategically transforming with new CEOs. The focus on home and business lending is shifting, driven by profitability considerations. Record deposit levels are partly due to population migration and COVID savings. Noelle also addresses the rising expense-to-income ratios, highlighting challenges with technology investments and the need for modernized systems.
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Banks Stable Amid Leadership Overhaul
- The big four banks are stable but undergoing transformational shifts under new leadership.
- CEOs are refocusing strategies across home lending, business lending and deposits to compete more aggressively.
Proprietary Mortgages Drive Margin Retention
- Home lending focus targets proprietary channels to avoid broker fees and keep margins.
- Pricing pressure has eased from below-cost levels, leaving net interest margins broadly steady.
Business Lending Offers Higher Margins
- Business lending attracts higher margins because of higher risk and capital charges.
- Banks' competition in business lending may benefit borrowers through better pricing and service.