APRA Reports Higher ADI Profits and Assets for June 2026 Quarter as Liquidity Metrics Diverge

Key Takeaways

• APRA's June 2026 quarterly ADI statistics show industry net profit after tax up 7.5% to AUD $42.5 Billion, with capital ratios stable at 20.5%.
• Mortgage credit grew 7.0% and investment lending's share rose, while the minimum liquidity holdings and net stable funding ratios declined.
• Compliance teams should use these figures to benchmark their institutions and anticipate supervisory focus on lending standards and funding resilience.

Deep Dive

APRA's June 2026 quarterly ADI statistics show industry net profit after tax up 7.5% to AUD $42.5 Billion, with capital ratios stable at 20.5%. Mortgage credit grew 7.0% and investment lending's share rose, while the minimum liquidity holdings and net stable funding ratios declined. Compliance teams should use these figures to benchmark their institutions and anticipate supervisory focus on lending standards and funding resilience.

Industry-wide capital and profitability remain strong. Net profit after tax rose to AUD $42.5 Billion from AUD $39.6 Billion. Total assets grew 6.0% to AUD $7,074.3 Billion, and the capital base grew 3.7% to AUD $480.0 Billion. Risk-weighted assets grew more slowly (3.1%), so the total capital ratio edged up to 20.5%. Liquidity and funding were more mixed. The liquidity coverage ratio improved to 133.0%, while the minimum liquidity holdings ratio fell to 16.0% and the net stable funding ratio fell 1.67 points to 114.5%. All remain well above regulatory minimums, but the downward trend in the latter two warrants monitoring, particularly for institutions with faster asset growth or reliance on wholesale funding.

The property data points to shifting risk composition. Residential credit outstanding grew 7.0% to AUD $2,558.5 Billion. Investment loans increased to 31.2% of the stock and 35.6% of new lending, and new loans funded rose 6.8% to AUD $200.5 Billion. High-LVR lending (≥80%) declined in both stock and flow, and arrears (30-89 days past due) improved to 0.54%. Non-performing loans were broadly flat at 1.01%. High-DTI lending (≥6x) was stable overall at 5.6% of new loans, but investment loans with DTI ≥6x rose to 8.9%. Commercial property exposures grew 8.3% to AUD $501.6 Billion, with limits up 8.6% to AUD $541.0 Billion, so growth in limits is outpacing exposures.

Recommended actions: (1) benchmark internal capital, liquidity (LCR, NSFR, MLH), and asset quality metrics against the industry data and document any material deviations; (2) review the investment-lending and high-DTI portfolio mix against internal risk appetite and APRA's expectations on serviceability and lending standards; (3) reassess commercial property limits, concentration, and stress-testing assumptions given the growth in limits; (4) update board and risk committee reporting and ICAAP/ILAAP inputs; and (5) confirm the accuracy and consistency of regulatory data submissions, since this data is derived from them. Note that figures exclude non-bank ADIs and year-on-year changes use unrounded values, so reconciliation to rounded figures may differ slightly.

Overall risk impact is low to moderate. The system is well capitalized with improving arrears, but rising investor share, high-DTI investor lending, and softer funding ratios are areas where macroprudential or supervisory scrutiny could intensify.

Source: Australian Prudential Regulation Authority