Australia Big Four's profit on loans at 7-year low amid higher bond costs

Sydney

THE profit Commonwealth Bank of Australia and its main competitors make on lending has dropped to a seven-year low as bond costs climb.

Net interest margins, the difference between funding costs and the interest charged on loans, dropped to an average of 2.02 per cent for Australia's four largest banks, a level unseen since 2008, data compiled by Bloomberg show. The measure is set to fall further in 2015, according to Macquarie Group.