Commonwealth Bank more than doubles money it makes on home loans

By Phil Jacob The Daily Telegraph 
AUSTRALIA'S biggest bank has more than doubled the money it makes on home loans since the height of the global financial crisis. 

And, while the Commonwealth Bank and its peers complain of having to pay depositors higher rates for the funds they lend out, Reserve Bank figures show the gap between deposit rates and the RBA cash rate is narrowing.
In fact, the gap is at the narrowest point in more than four years - evidence that bank lending is not entirely as expensive as they make out.
Of particular note, figures from the recent Commonwealth Bank profit announcement show net home loan incomes jumped more than 130 per cent since the height of the global financial crisis, to more than $2.6 billion, The Daily Telegraph reported.

Despite the income growth, the nation's top lenders have drawn widespread criticism for suggesting future Reserve Bank rate cuts may not be passed on in full due to "higher lending costs".
Speaking to reporters after Westpac's annual meeting last month, boss Gail Kelly warned global money markets, a key source of funding for Australian banks, had "effectively closed".
"As a direct result of the turmoil going on around the world, funding has become a more difficult issue," she said.
"And when they open up, our estimation is that the cost of raising money will actually be more than it was at any point during the global financial crisis."
The World Bank yesterday slashed its global growth forecasts, warning the world is on the edge of a new financial crisis, more damaging than the one that followed the collapse of Lehman Brothers in 2008.
Meanwhile, some analysts have suggested the impact of rising wholesale funding costs have been overstated by the banks, particularly as the sector can tap other sources for cheaper funding.
Deutsche Bank analyst James Freeman said he believed none of the major banks had yet to experience pressures on pricing. "While offshore wholesale funding costs have risen materially over recent months, the impact on banks margins and hence profit will be contained," he said.
Matt Levey, head of campaigns at consumer group Choice, is another cynic of banks "crying poor".

"We've seen from bank profits that they're obviously very profitable," Mr Levey said yesterday.