Bankers glum no more

After years of dire warnings about the future, our bankers suddenly appear have taken a happy pill.

Gone are the furrowed brows. Missing are the concerned warnings about global uncertainty. Absent is the handwringing about funding costs.

As they notch up their fourth consecutive year of record earnings, the body language from those running our big four banks has turned surprisingly positive.

Let's face it, it's difficult to maintain the facade of angst ridden financier when the current environment and future appear so rosy.

Between them, they still have the market sewn up. The Global Financial Crisis, which dealt a near death blow to so many banks around the world, was a godsend to Australia's big four, allowing them to gobble up the opposition, either through small bank acquisitions or the failure of non-bank lenders.

And the outlook increasingly appears to be benign (see Robert Gottliebsen's Why markets will keep booming).

ANZ (ANZ), NAB (NAB) and Westpac all delivered results in the past fortnight that either were slightly better or stunningly better than anticipated. And then there was the Commonwealth Bank's (CBA) first quarter result this morning with a serious lift in cash earnings to $2.1 billion.

The theme from CBA was consistent with the others: a decline in bad and doubtful debts. But after years of the worst credit growth since records began, CBA delivered a strong lift in revenue, indicating the appetite for debt once again has been awoken.

With interest rates at record lows, interest margins have become compressed. That's because rates on around 20% of deposits are zero or close to it. So there is no room for a bank to cut them further as interest rates drop and lending rates fall across the board.

But on every other measure, the big four now are reaping the rewards that come from being such dominant forces in their home market.

After such stunning earnings performances during a period of incredibly slow credit growth, investors clearly are anticipating even better times ahead .