In its latest Review, the Reserve Bank of Australia says:

The Australian financial system remains in good shape. The banking
sector, in particular, is continuing to perform strongly, supported by
the ongoing expansion of the Australian economy. Banks remain well
capitalised, are experiencing historically low levels of bad debts and,
despite a pick-up in competition, are continuing to record high rates
of return on equity.

It says there are 3 areas of risk:

• the international environment;
• the household sector;
• intensified competition in the banking sector.