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.
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
New data shows the number of lenders mortgage insurance (LMI) policies have risen by 25% in the last year: Data from Digital Finance Analytics shows the number of LMI policies taken out in Australia rose by 25 per cent from 218,593 in 2019 to 273,473 in 2020. More than 150,000 policies were taken out in
From the excellent George Tharenou at UBS Evidence Lab: 2021 UBS EL Mortgage survey implies material deterioration in loan standards UBS Evidence Lab surveyed ~900 Australians who took a mortgage in the last year – conducted from 21 June to 5 July, at the start of lockdowns in NSW and Victoria. The 2021 vintage is
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
RateCity has reported that the number of variable mortgage rates on its data base offered under 2% has jumped from 28 to 46 in just two months. Moreover, there are more than three times the number of sub-2% variable rates at the start of the year: “Since COVID, the battleground for the banks has been
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
New data released by the NSW Titles Office shows that the number of people taking out and discharging mortgages across NSW has hit an all-time high: In July, more than 27,000 residential mortgages were discharged from NSW Titles, up 37.1 per cent on July 2020… It comes at the same time residential mortgages registered on
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)
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
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
The more things change the more they stay the same. Long term readers of MB will remember the Sykesnado of 2015. That was when readers took legendary financial journalist and stock picker, Trevor Sykes, to the cleaners: Not only does the plunge in BHP Billiton shares following the Minas Gerais disaster in Brazil look overdone,
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
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,
XJO is soaring on Icarus wings today at another all-time high: The two main drivers are obvious. The CBA bubble is inflating at an alarming speed after its result, dragging other banks with it. The US curve steepening is a factor even as Australia crashes into deep recession. Crazy times: Mining is enjoying a day
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
The Australian mortgage market softened in June, recording its first monthly fall for nine months, according to new data released today by the Australian Bureau of Statistics (ABS). The total value of new mortgage commitments fell by a seasonally adjusted 1.6% in June 2021 to be up 82.7% year-on-year: As shown above, owner-occupiers have driven
“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
The Reserve Bank of Australia (RBA) has released its private sector credit aggregates data for the month of June. Quarterly mortgage credit growth continued to firm, rising for the 11th consecutive month to 1.8% – the highest rate of growth since 2015: Owner-occupiers continue to drive mortgage growth, rising by 2.2% over the quarter versus
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
According to Roy Morgan, mortgage stress plunged to a near record low in the three months to May, driven by the lowest mortgage rates on record alongside the rebound in jobs: New research from Roy Morgan shows an estimated 677,000 mortgage holders (17.3%) were at risk of ‘mortgage stress’ in the three months to May
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
The Reserve Bank has repeatedly said that the prospect of negative interest rates in Australia is highly unlikely. However, the Australian Prudential Regulation Authority (APRA) has advised that it raised the prospect of zero or negative interest rates with the nation’s banks in late 2020, and asked them to ensure that their technology systems would
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
CoreLogic leading mortgage index is a pretty good way to track what’s coming in ABS owner-occupier data. Suddenly, it ain’t look so crash hot: The index level is still high but the recent tumble is quite substantial and steep relative to past winter pullbacks. This may reflect lockdowns or just be a part of the
The Australian mortgage market remained red hot in May, hitting new all-time highs 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 4.9% in May 2021 to be up 95.4% year-on-year: As shown above, the record increase in new
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
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
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
The Reserve Bank of Australia (RBA) has released its private sector credit aggregates data for the month of May. Quarterly mortgage credit growth continued to firm, rising for the 10th consecutive month to 1.6% – the highest rate of growth since August 2017: Owner-occupiers continue to drive mortgage growth, rising by 2.0% over the quarter
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
