credit growth continues to grind down

It's well documented that credit growth has slowed from 18% some 20months ago to just above zero. Comments yesterday from RBA state that this slump in credit growth incompasses both households and companies. IMO it's unlikely growth rates in credit willresume anytime soon and very hard for banks to increase profits unless they squeeze more margin.... or pinch business from their rivals.
My take is that banks have limited ability to expand earnings while remaining at risk of a double whammy: fall in property prices and GFC MkII. Avoid despite high divs.

Part of article from today's Oz:

"THE Reserve Bank has warned that banks will have to get used to lower rates of credit growth because the caution evident in the household sector has also gripped corporate Australia.
Its latest review of the financial system, released yesterday, concludes that the era of double-digit credit growth was fuelled by the one-off deregulation of the financial sector and the fall in the inflation rate.

It says that a period of slower credit growth, financed more by deposits than by wholesale fund-raising, would be good for global financial stability. However, this would require banks to accept the changed market conditions.

"If industry participants were to attempt to sustain earlier rates of domestic credit growth, they could be induced to take risks that may subsequently be difficult to manage," the twice-yearly Financial Stability Review says.

for full article: http://www.theaustralian.com.au/business/credit-bonanza-is-over-but-slower-means-safer-says-rba/story-e6frg8zx-1226027699633