The essential infrastructure: How Australian banks power the economy
17.06.2026 - 03:29
Mandala's latest research, prepared for the Australian Banking Association, examines the often-hidden role Australian banks play in supporting households, businesses and the broader economy. The research finds that banks are deeply embedded in the financial lives of Australians - as lenders, as community investors, through the jobs they generate and increasingly as assets owned by Australians themselves through shares and superannuation. From financing homes and small businesses to supporting regional communities through hardship and disaster, the report builds a picture of a sector whose success is broadly shared across the Australian population.
This report sets out how the infrastructure of banking delivers for the economy and for Australian households.
Every dollar of profit that banks hold in regulatory capital directly expands their capacity to lend. In total, every $1.00 of profit held by Australian banks as capital supports $4.70 in economic activity, generating $110 billion in output and supporting 580,000 jobs across the economy over 2025.
Together, Australian households own 65 per cent of banks. This is equivalent to $470 billion in value, either directly through shares, or indirectly through their superannuation. In 2025, $17.3 billion in bank dividends accrued directly to Australian households.
SMBs generate 55 per cent of national output, and banks are their primary source of external finance: over $180 billion in new loans in 2025, with the value of SMB loans up 82% since 2020. Over the same period, SMB loan margins fell nearly 39 basis points – so SMBs are borrowing more, and on better terms. Banks are providing the finance, payment infrastructure and support that keep them running.
Banks work with local communities to provide support to recover from natural disasters and build resilience. In 2025 alone, banks provided over $720 million in community support, hardship and disaster relief – equivalent to around 15 per cent of the total insurance payouts due to extreme weather events in the same year.
Perhaps most visibly, banks are the machinery behind home ownership. In FY25, 65 per cent of all property settlements, equivalent to 445,000 transactions, were completed with a bank loan. However, less visibly, banks are also a key source of new construction funding, providing $49 billion in loans in FY25 to increase the supply of new homes, as well as helping Australians get a better rate through re-financing, and supporting over 280,000 Australians experiencing hardship to stay on top of their home loans.
The scale of Australia’s banking sector, its stability, its reach into every corner of the economy, and its role in the financial lives of Australians are not incidental features. They have arisen from sustained investment and a regulatory framework that has served Australia well.
Read the full report here.
Read our latest posts
Unlocking a Virtuous Cycle: Overcoming Barriers to AI in Australian Energy Systems
Mandala's latest research, developed in partnership with Microsoft, examines the barriers to transformative AI adoption in Australia's electricity system. The research finds that AI is one of the few tools able to unlock capacity and efficiency from the existing grid without waiting on new transmission and generation capacity, yet adoption today remains incremental. Three soft barriers, a lack of shared strategy, weak investment incentives and siloed data, are constraining Australia's ability to capture this potential. Overcoming them will require joint action from government, the technology industry and energy utilities to prove AI's value, align policy settings and fund pilots through to deployment.
8 Jul, 2026
Demonstrating the local benefits of AI infrastructure in Wisconsin
Mandala's latest research, prepared for Microsoft, examines the economic impact of hyperscale data center investment on Wisconsin's communities, businesses, and workforce. The research finds that committed data center projects will channel $16.5 billion to local suppliers, support more than 9,000 jobs during construction, and generate lasting economic activity across every county in the state, thereby extending Wisconsin's long tradition of industrial leadership into the AI era.
1 Jul, 2026
The essential infrastructure: How Australian banks power the economy
Mandala's latest research, prepared for the Australian Banking Association, examines the often-hidden role Australian banks play in supporting households, businesses and the broader economy. The research finds that banks are deeply embedded in the financial lives of Australians - as lenders, as community investors, through the jobs they generate and increasingly as assets owned by Australians themselves through shares and superannuation. From financing homes and small businesses to supporting regional communities through hardship and disaster, the report builds a picture of a sector whose success is broadly shared across the Australian population.
17 Jun, 2026
The threat of climate change to the US insurance industry
This joint report by the Coalition for an Insurable Future and Mandala Partners examines how climate change is undermining the stability of the US home insurance market. Homeowners insurance premiums have risen 38% since 2021, outpacing both inflation and wage growth, while 1 in 7 owner-occupied homes are now uninsured. Climate risk could push national premiums 35–107% higher by 2050, leave an additional 1.5–2.5 million households without cover by 2035, and cost the broader economy $1 trillion. The aggregate cost could rise to over $3 trillion by 2050. A preliminary assessment of state-level policy responses across California, Florida, Louisiana, New York and Colorado finds that effectiveness is mixed, and that the burden of costs falls primarily on homeowners, insurers and taxpayers, rather than on the sources of the underlying climate risk.
10 Jun, 2026