Moody's Investors Service says in a new...>

AUSTRALIA: Moody's Investors Service says in a new report that the profitability

of Australia's four major banks is under pressure from low interest rates amid

weak credit growth and intense competition, as well as structural challenges

that will erode the sector leaders' competitive advantages in the long term. The

four banks are Australia and New Zealand Banking Group Ltd (ANZ, Aa3/Aa3,

stable, a2), Commonwealth Bank of Australia (CBA, Aa3/Aa3, stable, a2), National

Australia Bank Limited (NAB, Aa3/Aa3, stable, a2) and Westpac Banking

Corporation (WBC, Aa3/Aa3, stable, a2). "The low interest rates are pressuring

the banks' profitability amid an already challenging operating environment, with

the potential to turn the once very profitable industry into a lower return

business," says Frank Mirenzi, a Moody's Vice President and Senior Credit

Officer. "We expect it will become increasingly difficult for the banks to

retain their competitive advantage, with reduced room for differentiated pricing

and ongoing competition in particular in the digital arena, although economies

of scale remain a significant strength for the major banks," adds Mirenzi.

- Link: http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1201041