Once numbered well into the hundreds, the 80 mutual banking sector entities left in the marketplace are trading on in fair shape, in the eyes of KPMG, a long term analyst of the sector.KPMG yesterday produced the latest instalment of an annual assessment of the sector. This report considers financial results of 18 mutual banks, three mutual building societies and 26 credit unions.Results of most of the remaining 33 credit unions are picked up, in aggregate at least, in APRA's already published consolidated data on the sector in its quarterly ADI performance snapshot.The main use of the KPMG report is to provide quick access to individual ADI results and allow comparisons. In 2016, these emphasise the overall strength of the sector (at least in the KPMG selection).The observers at KPMG, led by partner Peter Russell, picked optimistic language to portray a sector long shaped by mergers and the twin searches for scale and relevance.Balance sheets at mutuals strengthened through above system asset growth of 7.8 per cent compared with 5.1 per cent for the overall banking industry, Russell and colleagues pointed out.Their report shows the capital adequacy ratios of ten mutuals exceeded 20 per cent at the end of June 2016. MyCredit Union topped the table at 27.3 per cent, in KPMG's list. Heritage Bank reported the lowest capital ratio at 13.95 per cent.On average the sector's ratio dropped to 17.6 per cent at June 2016 from 17.9 per cent in 2015, in line with fast asset growth.Profits of the mutual ADI sector held steady, overall, over the year to June 2016 based on the data in KPMG's report.Aggregate net profit for the 47 mutual ADIs listed increased A$10 million to $448 million over the year before. The return on equity for this cohort eased to 5.76 per cent in 2016 from 5.99 per cent in 2015.Productivity measures for the sector also picked up.