The four major banks have increased their dominance in the Australian Banking industry over the past years. The majors have increased their profitability from around 75% of Industry profits in 2008, up to 90% (end of September quarter 2010).
An issue that I have highlighted previously, is that the major banks have not increased the equity position over the years through the increase in retained profits. The retained profits of the banks have essentially moved sideways since 2004. The banks have only been able to increase their equity base by issuing new shares, dividend re-investment, and staff share plans.
Historical performance of the four major banks. Had you invested $100,000 into each of the banks on the 1st January 2000, and since then re-invested the dividends each six months (like an accumulation index), the following is the performance result (ignoring any taxation effects):
Interestingly NAB's performance has been 50% of the other 3 banks. The compounded annual return for the banks were: ANZ - 12.2%, CBA - 12%, WBC - 12.4%, NAB - 5.6%.