Surging household ownership of Australian banks, record lending to first home buyers and strong competition helping mortgage holders save up to $2,000 a year are some of the findings of a new report released today.
‘The essential infrastructure: How Australian banks power the economy’ produced by Mandala on behalf of the ABA finds:
- 65 per cent of banks are now owned by Australian households – worth $470 billion – either directly through shares or through superannuation, with this value surging from $240 billion in 2010.
- Strong competition across the industry has supercharged refinancing activity, saving households up to $2,000 in mortgage repayments per year or $60,000 over the life of a loan.
- Around $180 billion in new lending was provided to small and medium businesses in 2025, up 82 per cent since 2020, while lending support for the agricultural sector is up 41 per cent to $141 billion.
- Banks have supported over 670,000 first home buyers to get into the housing market over the last five years while construction lending helped build 110,000 new homes last year.
ABA CEO Simon Birmingham said the report highlighted the critical role Australian banks play in supporting households, jobs, businesses and the broader economy.
“Australia has one of the strongest banking sectors in the world. Strong banks allow for more lending for people to buy homes, credit for businesses to grow and more capacity to support community initiatives such as disaster relief,” Mr Birmingham said.
“This isn’t a well known fact, but Australian households now own 65 per cent of Australia’s banks, be it directly through personal investments such as shares or their super.
“The value of investments by households in Australian banks has nearly doubled from $240 billion to $470 billion over the last 15 years. Ensuring our banks remain strong and profitable will deliver better retirement incomes back to households.
“This report shows lending to small businesses and our agricultural sector is at record levels. It’s these loans that helped generate $110 billion in economic activity last year and supported over 580,000 jobs.
“Banks have also helped over 670,000 first home buyers realise the dream of home ownership in the past five years, while supporting the construction of over 110,000 new homes last year.”
Mr Birmingham also said the report highlighted that mortgage holders and small businesses were also benefiting from stronger competition across the industry.
“Households with mortgages have been the big beneficiaries of a highly competitive banking sector. Strong competition amongst banks is seeing more than 640,000 mortgage holders refinance their home loans each year,” Mr Birmingham said.
“High refinancing rates show that barriers to changing banks have come down, while competition has gone up, with evidence showing that switching can save the average household up to $2,000 a year in mortgage interest payments. It pays to check with your bank to see if you can get a better deal or even shop around.
“This competition has also extended to small business lending with credit becoming more affordable. Lower borrowing costs supports more investment, more jobs and more output from this crucial part of the economy.”
