Further strengthening of capital "is likely to be necessary to accommodate additional international reforms as well as the recommendations of the FSI," APRA said in its 2015 annual report.In a survey of the banking industry and supervisory challenges APRA took a sober tone on the state of the industry.The ADI industry "continued to consolidate in 2014/15", the regulator observed."This continues a trend of increasing concentration evident for the past decade, driven by a combination of the global financial crisis, consolidation in the regional and smaller ADI sectors, and foreign bank branches scaling back in Australia."There are now 161 ADIs, comprising 73 banks, seven building societies, 75 credit unions and six other ADIs."Newcomers do have a go, though."Over the past decade there has been a small but reasonably steady influx of new entrants into the ADI industry, although this has been insufficient in number to offset mergers and exits," APRA said. New entrants have primarily been foreign-owned ADIs "and remain a relatively small part of the industry," it said."As a result, the share of industry assets held by the largest institutions has continued to increase. At the end of June 2015, the assets of the top five ADIs accounted for 79 per cent of industry assets [up from] 69 per cent a decade earlier."