Australia Banks Retain Negative Outlook
World Economy

Australia Banks Retain Negative Outlook

A leading credit ratings agency has maintained its negative scorecard for Australia’s banks, as their profitability is expected to slow down this year. That was the downbeat outlook given by Fitch since the nation’s banks are “significantly exposed” to residential mortgages, which made up 40-60% of their credit exposure in mid-2017, ABC.net reported. But when one considers that home loans account for nearly 70% of household debt—which in turn reached nearly 200% of disposable income—this is a potentially dangerous cocktail. “Combined with low wage growth and high underemployment, this leaves households susceptible to higher interest rates and deteriorating labor market conditions,” said Tom Roche, the analyst and lead author of the Fitch report. Fitch is betting that loan impairments for the banks will be on the rise this year. Given Australia’s official interest rate is at the historically-low 1.5%, there is potential for Australians to borrow further, which would take the nation’s record household debts even higher.


Short URL : https://goo.gl/98bNk3
  1. https://goo.gl/nyVC7L
  • https://goo.gl/JT12pm
  • https://goo.gl/rsxWir
  • https://goo.gl/Qw3jSH
  • https://goo.gl/5e8PnL

You can also read ...

Indonesia’s interest rate rise highlights need for urgent defensive action.
Argentina's return to financial chaos might seem remote to...
Kazakhstan Doing Better Than 5 Central Asian Peers
Despite starting from similar points upon the collapse of the...
Pakistan Retains Stable Rating
Moody’s Investors Service said that Pakistan’s (B3 stable)...
Goldman Says US in Dire Straits
Goldman Sachs’ analysts delivered a weekend note on the United...
Taiwan Economic Sentiment Weakens
Sentiment toward Taiwan’s economy weakened in May after the...
Bruno Le Maire
The stability of the eurozone will be at stake if a populist...
Investments by state enterprise rose 11.5% from a year earlier.
Thailand produced its fastest economic growth in five years in...
Chan Chun Sing (L) and CEO of the Singapore Business Federation Ho Meng Kit,  at The Business Times Leaders Forum on Monday.
With the rise in unilateralism and protectionism, the...

Add new comment

Read our comment policy before posting your viewpoints