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Insights / Banking & Financial Stability

How strong are Australian banks?

Ask this yourself

Show me how much capital Australian banks hold against their loans, how that has changed since the global financial crisis, and how it compares with banks in Canada, Britain and the United States.

Australian deposit-takers held regulatory capital worth 20.6 per cent of risk-weighted assets at March 2026, nearly double the 10.9 per cent of September 2008 and third of the ten economies charted here. Non-performing loans were 1.0 per cent of gross loans, and liquid assets rose from 13.4 to 22.7 per cent of total assets.

Regulatory capital to risk-weighted assets
20.6%
Mar 2026, as nationally reported to the IMF · 10.9% in Sep 2008
Tier 1 capital to assets
5.6%
Mar 2026, IMF series name; denominator not specified · 3.9% in Sep 2008
Non-performing loans to total loans
1.0%
Mar 2026, as nationally reported to the IMF · peak of 2.19% in Mar 2011
Liquid assets to short-term liabilities
40.5%
Mar 2026, as nationally reported to the IMF · 31.3% in Sep 2008

1. Capital has nearly doubled since the financial crisis

Capital absorbs losses before a deposit-taker's creditors do. Australian banks' rose from 10.89 per cent of in September 2008 to 20.56 per cent at March 2026 — a ratio of 1.89, on Aard's calculation from those two observations. The series rises around the Basel III phase-in and APRA's later capital reforms, but these ratios alone do not decompose the increase between rule changes, capital raised or retained, and shifts in risk-weighted exposures. Tier 1 is the loss-absorbing core and accounts for most of the total.

Capital ratios, Australian deposit-takers

Capital as a share of risk-weighted assets

  • Total regulatory capital
  • Tier 1 capital

Per cent of risk-weighted assets · Quarter

International Monetary Fund, Financial Soundness Indicators (FSI), Core and Additional Indicators, March quarter 2026 Financial Soundness Indicators (FSI), Core and Additional Indicators

Show the numbers
Capital ratios, Australian deposit-takers
QuarterTotal regulatory capitalTier 1 capital
2006-Q110.57.6
2006-Q210.47.5
2006-Q310.57.4
2006-Q410.37.3
2007-Q110.37.5
2007-Q210.37.3
2007-Q310.27.3
2007-Q410.17.1
2008-Q110.47.2
2008-Q210.67.2
2008-Q310.97.5
2008-Q411.38.4
2009-Q111.48.3
2009-Q211.28.5
2009-Q311.79.0
2009-Q411.99.3
2010-Q111.79.4
2010-Q211.69.4
2010-Q311.69.5
2010-Q411.49.6
2011-Q111.59.7
2011-Q211.69.9
2011-Q311.610.0
2011-Q411.610.2
2012-Q111.610.3
2012-Q211.610.4
2012-Q311.910.5
2012-Q411.910.6
2013-Q111.810.2
2013-Q211.610.1
2013-Q311.910.3
2013-Q411.610.2
2014-Q112.010.5
2014-Q212.110.5
2014-Q312.110.5
2014-Q412.210.6
2015-Q112.410.8
2015-Q212.911.1
2015-Q313.511.7
2015-Q413.811.8
2016-Q113.711.8
2016-Q213.911.8
2016-Q313.511.5
2016-Q413.711.4
2017-Q114.212.0
2017-Q214.111.9
2017-Q314.512.4
2017-Q414.612.4
2018-Q114.712.5
2018-Q214.512.4
2018-Q314.712.6
2018-Q414.812.7
2019-Q114.812.7
2019-Q214.912.9
2019-Q315.312.7
2019-Q415.713.1
2020-Q115.712.7
2020-Q216.313.3
2020-Q316.813.5
2020-Q417.614.0
2021-Q118.214.4
2021-Q218.414.5
2021-Q318.514.5
2021-Q417.913.9
2022-Q117.213.4
2022-Q217.013.1
2022-Q317.813.4
2022-Q417.813.4
2023-Q119.614.5
2023-Q219.714.5
2023-Q319.814.6
2023-Q420.014.7
2024-Q120.414.7
2024-Q220.314.6
2024-Q320.114.3
2024-Q420.214.1
2025-Q120.514.2
2025-Q220.414.3
2025-Q320.414.0
2025-Q420.414.0
2026-Q120.614.0

2. Third of the ten economies charted, on the risk-weighted measure

Of the ten economies charted, Australia's 20.56 per cent at March 2026 ranks third, behind Sweden and the Netherlands. Its margin over Switzerland, Britain and Germany is under half a percentage point — inside the range that differences in national implementation of the Basel rules can produce, so the ordering within that group is not a ranking. Australia's ratio was 3.25 percentage points above Canada's, which Aard obtains by subtraction. The latest observations span June 2024 to March 2026, so this is not a common-quarter comparison and not a world rank.

Regulatory capital to risk-weighted assets, latest quarter

Deposit-takers; each economy at its own latest available quarter, which differs by country

  • Australia (2026-Q1)
  • Canada (2026-Q1)
  • Other series (8)

Per cent of risk-weighted assets · Economy

International Monetary Fund, Financial Soundness Indicators (FSI), Core and Additional Indicators, March quarter 2026 Financial Soundness Indicators (FSI), Core and Additional Indicators

Show the numbers
Regulatory capital to risk-weighted assets, latest quarter
EconomyAustralia (2026-Q1)Canada (2026-Q1)United Kingdom (2026-Q1)United States (2025-Q4)Germany (2026-Q1)Netherlands (2026-Q1)Switzerland (2026-Q1)Sweden (2025-Q4)Japan (2025-Q3)Korea (2024-Q2)
Australia20.6—————————
Canada—17.3————————
United Kingdom——20.2———————
United States———16.7——————
Germany————20.1—————
Netherlands—————21.4————
Switzerland——————20.2———
Sweden———————21.8——
Japan————————17.2—
Korea—————————16.8

3. Leverage and liquidity, the ratios that are not risk-weighted

Risk weights are prescribed by APRA for most lenders and set by approved internal models at a few, so a risk-weighted ratio can move without new capital. The IMF's two unweighted ratios move more slowly. The IMF series named for against assets read 3.89 per cent in September 2008 and 5.56 per cent at March 2026; liquid assets went from 13.44 to 22.75 per cent of total assets. Neither ratio applies risk weights, but the leverage denominator is still a prudential definition rather than a plain balance-sheet total.

Ratios reported without risk weighting, Australian deposit-takers

IMF Financial Soundness Indicators, deposit-takers

  • Tier 1 capital to assets (IMF series name)
  • Liquid assets to total assets

Per cent of total assets · Quarter

International Monetary Fund, Financial Soundness Indicators (FSI), Core and Additional Indicators, March quarter 2026 Financial Soundness Indicators (FSI), Core and Additional Indicators

Show the numbers
Ratios reported without risk weighting, Australian deposit-takers
QuarterTier 1 capital to assets (IMF series name)Liquid assets to total assets
2006-Q14.810.7
2006-Q24.910.6
2006-Q34.810.9
2006-Q44.810.7
2007-Q14.811.2
2007-Q24.610.9
2007-Q34.612.9
2007-Q44.512.2
2008-Q14.012.7
2008-Q23.912.0
2008-Q33.913.4
2008-Q44.213.9
2009-Q14.312.1
2009-Q24.413.6
2009-Q34.613.2
2009-Q44.714.5
2010-Q14.715.3
2010-Q24.515.5
2010-Q34.515.5
2010-Q44.615.6
2011-Q14.615.3
2011-Q24.616.1
2011-Q34.516.2
2011-Q44.716.1
2012-Q14.816.3
2012-Q24.717.3
2012-Q34.716.0
2012-Q44.817.7
2013-Q14.816.9
2013-Q24.617.5
2013-Q34.816.8
2013-Q44.717.8
2014-Q14.817.1
2014-Q24.817.7
2014-Q34.716.9
2014-Q44.717.1
2015-Q14.816.6
2015-Q25.016.9
2015-Q35.216.5
2015-Q45.317.7
2016-Q15.317.3
2016-Q25.217.6
2016-Q35.617.5
2016-Q45.418.3
2017-Q15.718.4
2017-Q25.618.8
2017-Q35.918.2
2017-Q45.918.6
2018-Q16.018.1
2018-Q25.918.2
2018-Q36.017.9
2018-Q45.918.7
2019-Q16.018.2
2019-Q26.118.3
2019-Q36.015.9
2019-Q46.216.5
2020-Q15.718.8
2020-Q26.218.8
2020-Q36.219.8
2020-Q46.420.2
2021-Q16.619.7
2021-Q26.521.4
2021-Q36.521.7
2021-Q46.223.2
2022-Q16.022.8
2022-Q25.822.9
2022-Q35.823.1
2022-Q45.923.7
2023-Q16.224.2
2023-Q26.223.8
2023-Q36.223.2
2023-Q46.123.8
2024-Q16.223.1
2024-Q26.223.1
2024-Q35.922.7
2024-Q45.723.3
2025-Q15.823.5
2025-Q25.823.1
2025-Q35.623.4
2025-Q45.623.5
2026-Q15.622.7

4. Bad loans are low, and have been for five years

were 1.01 per cent of total gross loans at March 2026, against a peak of 2.19 per cent in March 2011. Across the twenty-one quarters since March 2021 the ratio has stayed between 0.72 and 1.12 per cent. Six of the nine comparators shown report a lower latest ratio, but their reference quarters differ and so may their national definitions of non-performing. The ratio is a sector aggregate: it says nothing about provisioning, arrears not yet classified, or where losses would fall.

Non-performing loans to total gross loans, latest quarter

Deposit-takers; each economy at its own latest available quarter, which differs by country

  • Australia (2026-Q1)
  • Canada (2026-Q1)
  • Other series (8)

Per cent of gross loans · Economy

International Monetary Fund, Financial Soundness Indicators (FSI), Core and Additional Indicators, March quarter 2026 Financial Soundness Indicators (FSI), Core and Additional Indicators

Show the numbers
Non-performing loans to total gross loans, latest quarter
EconomyAustralia (2026-Q1)Canada (2026-Q1)United Kingdom (2026-Q1)United States (2025-Q4)Germany (2026-Q1)Netherlands (2026-Q1)Switzerland (2026-Q1)Sweden (2025-Q4)Japan (2025-Q3)Korea (2024-Q2)
Australia1.0—————————
Canada—0.73————————
United Kingdom——0.90———————
United States———0.96——————
Germany————1.9—————
Netherlands—————1.5————
Switzerland——————0.71———
Sweden———————0.43——
Japan————————1.0—
Korea—————————0.29

What to watch for

  • Reporting economies publish on different schedules, so the cross-country charts compare each country's latest available quarter, not a common one — June 2024 for Korea through March 2026 for most others. Each point is labelled with its quarter.
  • New Zealand is in the underlying call and absent from both cross-country charts because the IMF publishes no observations for it on these indicators, not because it was excluded.
  • Financial Soundness Indicators are harmonised by the IMF but compiled nationally from supervisory returns. Consolidation basis, accounting standards and the national implementation of the Basel capital rules all differ, so small gaps between countries are not meaningful.
  • The IMF names the leverage series Tier 1 capital to assets and publishes no definition, consolidation basis or accounting standard alongside these observations. Whether the denominator is total balance-sheet assets or the Basel III leverage exposure measure, which includes off-balance-sheet items, is not established by the data or its metadata, and Aard has not resolved it. The series carries no break flag and shows no step at the Basel III phase-in, but that is an absence of evidence rather than evidence of a single definition.
  • Risk-weighted assets depend on risk weights that APRA prescribes for most lenders and approves as internal models for a few. A rising risk-weighted capital ratio can reflect lower modelled or prescribed risk rather than more capital, which is why the unweighted ratios are shown alongside it.
  • Australian capital ratios rise around the Basel III phase-in and APRA's later capital reforms. These are changes in the rules as well as in bank behaviour, and the series carries no break flag marking them.
  • The non-performing loan ratio covers all lending by deposit-takers, not mortgages alone.
  • The doubling of the capital ratio, the gap with Canada of 3.25 percentage points and the ordinal positions on this page are calculated by Aard from IMF Financial Soundness Indicators observations; the IMF publishes neither the comparisons nor the ranking.

References

Data extracted . Reviewed 2026-09-15 by Aard Data Team. Each numbered entry is the publication that documents the figures; the calls beneath it are the ones the retrieval actually made, and each figure is numbered under its publication — 1.1, 1.2 — and links to the narrowest call that returns it.

  1. [1]International Monetary Fund, Financial Soundness Indicators (FSI), Core and Additional Indicators, March quarter 2026
    Released 2026-09-15
    Vintage: Observations carry a publication timestamp of 2026-09-15T06:04:42Z. National compilers revise supervisory returns without notice, and reporting economies publish on different schedules, so the latest available quarter differs by country.
    • API Calls: · extracted 15 September 2026
      IMF.STA:FSIC(13.0.1)https://api.imf.org/external/sdmx/2.1/data/FSIC/AUS.REM+S1+S11+S123+S128+S1281+S1282+S129+S12CFSI+S12R+S14..A+M+Q

      One call returns every FSI indicator the IMF publishes for Australia; this record is the risk-weighted capital pair that draws the first chart and the claims in its commentary. The chart runs 2006-Q1 to 2026-Q1; the observations are the anchors the prose quotes.

      • 1.52.2 % of total gross loans · 2011-Q1 · Non-performing loans to total gross loans, deposit-takers, AustraliaAUS.S12CFSI.AQ12_CFSI_PT.Q
      • 1.61.01 % of total gross loans · 2026-Q1 · Non-performing loans to total gross loans, deposit-takers, AustraliaAUS.S12CFSI.AQ12_CFSI_PT.Q

      Same Australian call; the non-performing loan ratio and its post-crisis peak.

      • 1.73.892 % of total assets · 2008-Q3 · Tier 1 capital to total assets, deposit-takers, AustraliaAUS.S12CFSI.T1KTA_CFSI_PT.Q
      • 1.85.558 % of total assets · 2026-Q1 · Tier 1 capital to total assets, deposit-takers, AustraliaAUS.S12CFSI.T1KTA_CFSI_PT.Q
      • 1.913.442 % of total assets · 2008-Q3 · Liquid assets to total assets, deposit-takers, AustraliaAUS.S12CFSI.FSI283_LIQATTA_PT.Q
      • 1.1022.746 % of total assets · 2026-Q1 · Liquid assets to total assets, deposit-takers, AustraliaAUS.S12CFSI.FSI283_LIQATTA_PT.Q
      • 1.1131.3 % of short-term liabilities · 2008-Q3 · Liquid assets to short-term liabilities, deposit-takers, AustraliaAUS.S12CFSI.FSI765_CFSI_PT.Q
      • 1.1240.5 % of short-term liabilities · 2026-Q1 · Liquid assets to short-term liabilities, deposit-takers, AustraliaAUS.S12CFSI.FSI765_CFSI_PT.Q

      Same Australian call as the capital record, different indicators: the unweighted ratios, which no risk model can flatter. They draw the third chart and its commentary, and two of the key figures.

    • API Calls: · extracted 15 September 2026
      IMF.STA:FSIC(13.0.1)https://api.imf.org/external/sdmx/2.1/data/FSIC/CAN+GBR+USA+NZL+NLD+SWE+DEU+CHE+KOR+JPN.S12CFSI+S14.FSI688_CFSI_PT+FSI626_CFSI_PT+AQ12_CFSI_PT+ROA_CFSI_PT+ROE_CFSI_PT+FSI99_CFSI_PT+FSI107_CFSI_PT+T1KTA_CFSI_PT+FSI765_CFSI_PT+FSI157_AFSI_PT+FSI179_AFSI_PT+FSI85_AFSI_PT+AQ14_CFSI_PT.Q

      The comparator call. Australia's own 20.56% comes from the Australian call, not this one — the ranking is the two put side by side, and each economy is shown at its own latest available quarter because reporting schedules differ.

      • 1.220.73 % of total gross loans · 2026-Q1 · Non-performing loans to total gross loans, deposit-takers, CanadaCAN.S12CFSI.AQ12_CFSI_PT.Q
      • 1.230.9 % of total gross loans · 2026-Q1 · Non-performing loans to total gross loans, deposit-takers, United KingdomGBR.S12CFSI.AQ12_CFSI_PT.Q
      • 1.240.96 % of total gross loans · 2025-Q4 · Non-performing loans to total gross loans, deposit-takers, United StatesUSA.S12CFSI.AQ12_CFSI_PT.Q
      • 1.251.88 % of total gross loans · 2026-Q1 · Non-performing loans to total gross loans, deposit-takers, GermanyDEU.S12CFSI.AQ12_CFSI_PT.Q
      • 1.261.45 % of total gross loans · 2026-Q1 · Non-performing loans to total gross loans, deposit-takers, NetherlandsNLD.S12CFSI.AQ12_CFSI_PT.Q
      • 1.270.71 % of total gross loans · 2026-Q1 · Non-performing loans to total gross loans, deposit-takers, SwitzerlandCHE.S12CFSI.AQ12_CFSI_PT.Q
      • 1.280.43 % of total gross loans · 2025-Q4 · Non-performing loans to total gross loans, deposit-takers, SwedenSWE.S12CFSI.AQ12_CFSI_PT.Q
      • 1.291.03 % of total gross loans · 2025-Q3 · Non-performing loans to total gross loans, deposit-takers, JapanJPN.S12CFSI.AQ12_CFSI_PT.Q
      • 1.300.29 % of total gross loans · 2024-Q2 · Non-performing loans to total gross loans, deposit-takers, KoreaKOR.S12CFSI.AQ12_CFSI_PT.Q

      Same comparator call, the non-performing loan indicator. Australia's 1.01% comes from the Australian call.

    • API Calls: · extracted 16 September 2026
      IMF.STA:FSIC(13.0.1)https://api.imf.org/external/sdmx/2.1/data/FSIC/AUS.S12CFSI..Q?startPeriod=2008&endPeriod=2026
      • 1.312.19 % of total gross loans · 2011-Q1 · Nonperforming loans to total gross loans, (Core FSI), Deposit takers, PercentAUS.S12CFSI.AQ12_CFSI_PT.Q
      • 1.320.719 % of total gross loans · 2022-Q4 · Nonperforming loans to total gross loans, (Core FSI), Deposit takers, PercentAUS.S12CFSI.AQ12_CFSI_PT.Q
      • 1.331.121 % of total gross loans · 2021-Q1 · Nonperforming loans to total gross loans, (Core FSI), Deposit takers, PercentAUS.S12CFSI.AQ12_CFSI_PT.Q
      • 1.341.009 % of total gross loans · 2026-Q1 · Nonperforming loans to total gross loans, (Core FSI), Deposit takers, PercentAUS.S12CFSI.AQ12_CFSI_PT.Q

      IMF Financial Soundness Indicators, Australian deposit-takers, quarterly 2008 to 2026. The non-performing loan ratio (AQ12_CFSI_PT) peaks at 2.19 per cent in 2011-Q1 and stays between 0.72 and 1.12 per cent across the twenty-one quarters from 2021-Q1. The IMF publishes no STATUS, OVERLAP, CONSOLIDATION_BASIS or ACCOUNTING_STANDARDS value on these observations.

    International Monetary Fund. Financial Soundness Indicators (FSI), Core and Additional Indicators, IMF.STA:FSIC(13.0.1), https://data.imf.org/en/Data-Explorer?datasetUrn=IMF.STA:FSI. Accessed on 15 September 2026. Used under the IMF Copyright and Usage Terms — all rights reserved; not a Creative Commons licence.

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