Kohler: Big banks to dominate "for years"

By By BN | 10 Nov 2009,, 10 November 2009

Australian banks are in a "sweet spot" that will last for a "long time" according to Alan Kohler, author of investment newsletter, The Eureka Report.

In an article written for the ASX email newsletter listing the "10 big investment opportunities and threats" for investors in 2010, Kohler wrote of banks that while the "good times" enjoyed by Australian banks would never last and eventually the mortgage securities market would return and provide the big banks with some competition, this would take years to occur.

Of banks, Kohler wrote, "Perversely, even though banking excesses caused the crisis, it has been a boon for Australia's banks. Their market share has increased to total dominance as non-bank lenders have all but disappeared along with the market in residential mortgage-backed securities."

"At the same time, the expected massive increase in bad and doubtful debts did not materialise, and from next year banks will be writing provisions down, and back into their profits as windfall gains."