Bankers are waiting anxiously to see how their business and home loan books will perform when faced with the double pressure of rising unemployment and slowing economic activity.
The country’s major banks face an anxious six-month wait before they know whether their customers and their massive mortgage books can withstand the double strain of sharply rising interest rates and spluttering economic activity.
As Westpac chief executive Peter King noted last week, this delay means “the impact of rapid monetary policy tightening is yet to be fully felt”. He noted that only eight out of 11 Reserve Bank interest rate rises had flowed through into higher customer repayments. In its half-year results for the six months to December 31, 2022, Commonwealth Bank, which is the country’s largest home lender, said that $96 billion in fixed rate home loans would expire this year, followed by a further $55 billion in 2024.
According to Kevin Corbally, ANZ Group’s chief risk officer, “the question is, who are the home loan borrowers that you’re more likely to be worried about? Anyone who has taken out a loan, the rate today is higher than the rate assessed 18 months or two years ago. A big jump in the unemployment rate would inevitably result in an increase in business failures, as well as a substantial rise in the number of retail customers falling behind on their home loan repayments, their credit cards and personal loans.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Grappling with Zuckerberg: why do bros go mad for Brazilian jiu-jitsu?Some don’t consider it very elegant, but if you want to get ripped without knowing quite how, do it
Read more »
Why Australia needs to be at the G7 tableAustralia is a Pacific nation that has felt the sharp edge of Chinese pressure. That gives it something to say at a G7 meeting of the old transatlantic powers.
Read more »
Why Erdogan’s re-election chances just took a big hitA challenger has withdrawn from Turkey’s critical election, handing his opponent more votes, in a blow to President Recep Tayyip Erdoğan’s chances of victory.
Read more »
Why NRL can finally break through in US with its great Vegas gambleDespite a chequered history in the US, the NRL believes rugby league can finally hit the jackpot in Sin City.
Read more »
Home brand boom: Why consumers are turning to supermarket-owned labelsFrom coffee to cleansing wipes, and baby food to beer, thousands of supermarket-owned brands now line the aisles of our major grocery retailers, with more products added each quarter.
Read more »
Keeping up the fight: Why towns are desperate to halt wave of bank closuresThe last of the big banks has finally departed Alexandra, but locals in the tourism town are determined to protect it from the economic decline they fear so often follows when branches shut their doors.
Read more »