Australia's big four banks have been ranked the most profitable in the developed world for the third year running, reigniting criticism about their market dominance.
With big bank profits likely to exceed $26 billion this year, figures show the Commonwealth Bank, Westpac, ANZ and NAB made better returns last year than lenders in 10 major developed countries, including Canada, the US, Britain and Europe.
In figures to be published on Monday, the Switzerland-based Bank for International Settlements says pre-tax profits of the big four were equal to 1.18 per cent of their total assets.
This puts Australian banks well ahead of all other wealthy countries on the list, with lenders only in the emerging economies of Brazil, Russia, India and China making better returns.
The league table shows Australian banks have lower costs than most of their peers and enjoy wider interest margins, a measure of profitability from lending. After the banks failed to pass on official interest rate cuts in full to borrowers last year, consumer group Choice seized on the results as a sign of feeble competition.
Its head of campaigns, Matt Levey, said the figures undermined bank claims that conditions were tough, an argument banks made last year to justify unpopular decisions on mortgage rates.
''It shows we have inadequate competitive pressure in that market. We still have don't have a situation where consumers are willing enough to look beyond the big four banks,'' he said.
''These are institutions which enjoy a privileged position in the community. They are supported to a huge extent by government and taxpayers and in return I don't think we are seeing the amount of competitive pressure that we deserve to see,'' he said.
The big four control 83 per cent of the lucrative mortgage market, after several smaller lenders were taken over during the global financial crisis.
In late 2010, the Gillard government made changes designed to put more competitive pressure on the big four and the issue will be examined again as part of a financial system inquiry if the Coalition wins government in September.
But the chief executive of the Australian Bankers' Association, Steven Munchenberg, said the banks' superior profits were explained by the economy's resilience. Most other countries on the list had been in the economic doldrums in recent years.
''There's a little bit of the Steven Bradbury effect - we've been doing so well because everyone else has fallen over,'' Mr Munchenberg said.
''The big difference between Australia and the rest of the world is we've had 20 plus years of uninterrupted economic growth.''
But even before the crisis, the figures show Australian banking was a highly profitable business. Among developed countries, only the US had more profitable banks between 2000 and 2007.
In response to a sharp slowdown in loan growth since the global financial crisis, banks have embarked on deep job cuts. The Finance Sector Union says the big four cut more than 3300 positions last year, and 1300 jobs so far this year.
After it emerged last week that ANZ was considering sending 590 jobs overseas, the union's national secretary Leon Carter said the profit numbers from the Bank for International Settlements showed banks were ''sacrificing'' their staff for shareholder gain. The figures also showed Australian banks' operating costs were the fourth lowest among their peers after Sweden, France and Japan, at 1.19 per cent of assets.
Net interest margins were third highest among banks in developed countries, while provisions for bad loans were in the middle of the pack.
The BIS also ranked Australian banks as the most profitable in the developed world in 2011 and 2010. The latest report said Australian banks had ''consolidated'' the gains of previous years.