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+1 with Aaron on this. The number to look at is return on equity(other ppls money) not assets... not sure if the accounting still groups active loans as assets and that would make the ROA percentage lower.

Thanks guys for that. For some reason, I'm skeptical that banks here don't take part in that sort of practice in some shape or form. Most didnt know what the US banks were doing till the dust cleared.... On another note, thats exactly why plenty of Australians are up in arms with the banks...

Love reading a thread like this. About banks profits and all, does anybody know if Australian banks here practise any form of fractional reserve banking (or in other terms making money out of thin air)? This practise was/?is rife in the US of A up to the GFC and allowed them to multiply their...