The long lost Karen Maley has an interesting tidbit today on the lengths bankers are going to to avoid miners right now:
Banks are already bracing themselves for a spike in bad loans from their exposure to the mining sector. But tensions in the banking fraternity are flaring as lenders adopt different approaches to dealing with their mounting problems.
According to banking sources, some banks are in favour of moving quickly to take control of the troubled company, even if it means that the lender has to lift its provisions for bad and doubtful debts.
However, most of the country’s big four banks seem keen to do everything possible to keep troubled companies out of formal administration.
…But bankers say that the decision isn’t an easy one. If they decide to put the companies under, the banks can find themselves as the new owners of a lot of assets – such as trucks and earth-movers – that are extremely difficult to sell at the moment.
I’m wondering what this is doing to prospective mines like Gina’s Rinehart’s Roy Hill, which of itself is aiming to raise several billion dollars in bank loans. Nothing good, presumably.
Not that banks were ever big financiers of the boom, which ran largely on equity. But it still won’t help the capex cliff.
