Yesterday, the Australian Prudential Regulatory Authority (APRA) wrote to all Authorised Deposit-Taking Institutions (ADIs) – i.e. banks, building societies and credit unions – highlighting concerns relating to the banks’ commercial property exposures, urging lenders to exercise more caution in their commercial property books and effectively calling on them to rein-in lending:
…commercial property lending… has historically been the source of significant credit losses for the Australian banking industry. It is critical that ADIs maintain appropriate standards through the credit cycle, and are prepared to tighten those standards as circumstances dictate.
