Australian banks

MacroBusiness covers Australian banks from the perspective of their macro-economic role, as political economy actors, as investment propositions and in terms of financial stability and capital adequacy. Australian banks have played a crucial role in inflating the Australian property bubble, exist within an utterly privileged position as “too big to fail” institutions and operate within a deeply distorted financial architecture that has Australian tax payers well and truly on the hook in the event of trouble. MacroBusiness seeks to define this role for investors as well as change it in the name of the Australian national interest.

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Australia: the land of easy mortgage credit

Recall the Hayne Banking Royal Commission’s very first recommendation, which was to maintain responsible lending laws: Hayne arrived at this recommendation after observing multiple cases of predatory lending over the Royal Commission’s 12 month deliberation. Also recall that Treasurer Josh Frydenberg tried to repeal these responsible lending laws, claiming they are essential to helping the

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Aussie mortgage rates continue to push lower

Although the cash rate hasn’t budged since October last year, Australian mortgage rates continue to push lower, according to CoreLogic: According to CoreLogic, mortgage rates were 3 basis points lower over the month for existing owner-occupier loans and 1 basis point lower for new owner-occupier loans. However, fixed rates have begun edging higher. These have

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Australian mortgage demand still red hot

The Australian mortgage market rose in July despite lockdowns, according to new data released today by the Australian Bureau of Statistics (ABS). The total value of new mortgage commitments rose by a seasonally adjusted 0.2% in July 2021 to be up 68.2% year-on-year: As shown above, owner-occupiers have driven mortgage demand this cycle, whereas investor

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Michael West: Banks shamelessly rorting RBA’s bail-out fund

The Committed Liquidity Facility (CLF) was established in late-2011 in order to meet the Basel III liquidity reforms. Since January 2015, those ADIs to which APRA applies the Basel III liquidity standards have been required to hold high-quality liquid assets (HQLA) sufficient to withstand a 30-day period of stress under the liquidity coverage ratio (LCR)

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CBA bubble resumes popping

The CBA bubble has had a rough couple of days since its results exposed it for the revenue growthless utility that it is. It’s been more or less straight down since then, setting up a spectacular double-top chart pattern: It remains spectacularly overvalued at nearly 20x NTM, versus its peers: And other GSIBs in the

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Banker: Rapid house price growth “fantastic”. Don’t regulate.

Bendigo & Adelaide Bank’s net profit for 2020-21 rose 172% to $524 million, with its cash earnings rising 51% to $457.2 million. Deposit growth increased by 14.2% whereas applications for loans surged by 36.2%. Commenting on the current heat in the housing market, MD Marnie Baker said that rapid price growth is “fantastic” and claimed

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Marvel at CBA bubble profits…from public losses

A terrific article yesterday from Crikey’s Bernard Keane and Glenn Dyer: The CBA, like the rest of the banking and finance sector, owes much of its success over the last 12 months to the colossal JobKeeper package and additional JobSeeker payments, which not merely supported households but kept workers linked to employers, enabling a much

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Why macro-prudential mortgage curbs are needed now

REA’s Cameron Kusher believes that now is not the time for the Australian Prudential Regulatory Authority (APRA) to implement macro-prudential restrictions on mortgage lending: While prices have risen rapidly since the onset of the pandemic, growth has been much more benign over recent years having increased by 33.2% in total over the past five years,

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APRA readies to drop hammer on mortgage market

For months we have been warning that the Australian Prudential Regulatory Authority (APRA) would impose macro-prudential mortgage restrictions to cool the market by the end of the year or early next, such as loan-to-value ratio (LVR) restrictions, debt-to-income (DTI) restrictions, increased mortgage buffers, or restrictions on interest-only lending. These types of restrictions were imposed by

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Banks tighten mortgage screw on Sydney leper colony

“Team Australia” has been breaking apart for some time now as premiers and federalies tear at each other’s throats. The media is enjoying the COVID state of origin. Now the banks have joined in: CBA is tightening leading criteria focussed specifically on any loss of income incurred owing to COVID. JobKeeper-syle payments will not longer

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Big bank specufestor mortgages still contained

If macropriudential moves were not already fading on the interminable Sydney Delta outbreak, today’s APRA data pushes it further from sight. The big eight banks lifted specufestor lending to 0.3% monthly for June (with CBA having its own little party): And still only 1.1% year on year: Then there’s Mad Macquarie as usual: Big eight

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Commonwealth Bank bubble continues to burst

The Commonwealth Bank bubble is continuing to burst today, hitting new intraday lows today: The chart is quickly forming a bearish descending triangle as well, so if we see a decisive break of the high $97 support area then deeper downside opens up. And with good reason. The valuation remains extreme, completely out of whack

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CBA still a bubble

I recently picked the near top of the CBA bubble to start throwing pins. Since I began I first raised the notion that CBA is a preposterous bubble, it has deflated by 10%, more than its banking peers: Yet CBA remains stupidly overvalued. It is virtually no different to the other big three. Its yield

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Mortgage interest payments crater to 21 year low

The Reserve Bank of Australia (RBA) yesterday released household finances data for the March quarter of 2021. This data showed that the ratio of household and mortgage debt to disposable income rose slightly to 180.9% and 138.8% respectively over the March quarter: Household debt is being driven by owner-occupier mortgages, where debt levels hit a

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ASIC so bad that a regulator of the regulator introduced

Investigative journalist Anthony Klan has done a terrific job exposing regulatory capture at ASIC, which has reportedly turned a blind eye to Westpac ripping off 915,000 superannuation account holders of $1.65 billion. Worst of all, the head of ASIC’s superannuation enforcement is none other than a former Westpac lawyer: The corporate regulator has taken zero

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Property investor rebound not enough for macroprudential

APRA monthly banking statistics are out and show that investor mortgages are still some distance from triggering macroprudential tightening. May numbers showed monthly growth slowing as Westpac pulled back though this looks more likely to be  a portfolio adjustment to me: Even so, at just 1% year-on-year growth, investors mortgages from the big eight is

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Moody’s: Macroprudential clamps coming to Aussie mortgages

Moody’s with the note: As economic recoveries proceed at different speeds and stages around the globe, there is rising interest about when normalisation of monetary policy will begin. Many central banks have had interest rates sitting at the lower bound since providing unprecedented monetary support at the height of the global pandemic. Normalisation of the