THE NEWS WRAP: Australia’s ‘big four’ banks set to post record profits

Businesses could delay their investment plan due to the strength of the Australian dollar, a senior banker has warned.

Philip Chronican, CEO of ANZ Banking Group’s Australian business, told the The Australian Financial Review that a sustained period of parity with the US dollar will see “non-resources parts of the economy struggle.”

Banks set for record profits

Australia’s ‘big four’ banks are all set to post record profits in a signal that they have bounced back from the economic downturn. Bad debt has eased, although analysts still expect higher interest rates in order to maintain growth, in a move that will dismay many small firms.

Labor plots spending cuts

The federal government is looking at fresh budget cutbacks to help fund $2.4 billion of spending pledges. It’s uncertain whether small businesses will be directly affected by the cuts, although The Australian Financial Review has speculated that the ‘cash for clunkers’ scheme, where cash rebates are given for the trade-in of older cars, could be axed.

The markets

The Australian markets are set for a flat start to this morning, while the US’ Dow Jones Industrial Average will be looking to make up a slip of 14.01 points. The Australian dollar steadied at 93 US cents.