News: WBC UPDATE 1-Australian bank profits likely to fall again this year - Fitch

(Adds details on bank margins and property settlements)

SYDNEY, Nov 9 (Reuters) - Operating profits at Australia's "Big Four" banks are likely to come under further pressure over the next 12 months as stress from the mining and apartment-building sectors undermines asset quality, according to Fitch Ratings.

However, the ratings agency said the banks were likely to remain highly profitable compared with international peers and in a strong position to cope with capital pressures that could result from upcoming regulatory changes.

Fitch said the banks, which include Commonwealth Bank of Australia (CBA) (CBA), Westpac (WBC), Australia and New Zealand Banking Group (ANZ) and National Australia Bank (NAB), posted their first combined drop in pretax profit in eight years for the 2016 financial year. Pretax profit fell to A$41 billion ($31.80 billion), down 7 percent from the prior year.

Australian bank returns have been under pressure from higher wholesale funding and deposit costs, as well as regulatory changes requiring them to hold more capital against their mortgage books to provide a more level playing field for smaller banks.

Fitch said it was also concerned property developers might soon start experiencing problems settling agreed apartment sales, which could cause issues for the banks over the next 18 months. ($1 = 1.2893 Australian dollars)