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04:15:14 pm

Australian Home Loans, Confidence Drop Pressures Rates

Macquarie eyes a slice of Australian banks' home mortgage pie

That was the steepest fall since February 2002, according to data compiled by Bloomberg. Home-loan approvals rose for nine months through December, before falling a revised 1.1 percent in January, todays report showed. We had this sort of modest upswing throughout a lot of last year and that was assisted by some stamp-duty concessions for first-home buyers in New South Wales and some grants in Queensland, RBCs Ong said, referring to two Australian states. But that seems to be fading and the data is consistent with that. Biggest Banks Home-loan growth may weaken further after Australias four biggest banks raised standard variable mortgage rates independently from the RBA in February, drawing criticism from the government. The central bank has said that competition for deposits, recent covered-bond sales and the cost of swapping funds raised offshore into Australian dollars added to the price lenders paid to raise money.
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Sydney Home Prices Expected to Keep Rising, April 11

But the fears themselves are real and the banks' earnings over the next two weeks will be scrutinized for any hints as to the health of the mortgage market. ANZ, Commonwealth Bank, NAB and Westpac are on track to report an 8.5 percent rise in combined full-year cash earnings to A$27.1 billion. Any shifts in home loan market share for individual banks are also set to go under the microscope, with analysts citing commentary on mortgage demand and pricing from the banks as drivers for share prices. Australian mortgages represent 61 percent of gross loans and advances for Westpac, 60 percent for Commonwealth Bank, 45 percent for NAB and 42 percent for ANZ, according to figures from UBS. Westpac may be of particular interest after it experienced slower growth in its domestic mortgage book of 3.8 percent in the 12 months to the end of August, compared to the banking industry average of 5.1 percent. It reports on November 4 and is expected to post annual cash clicking here earnings, which exclude one-off and non-cash items, of A$7.1 billion, up 7.6 percent on the year before, according to an average of estimates from three analysts polled by Reuters. ANZ reports on October 29 and is projected to book a 9.8 percent rise in full-year cash earnings of A$6.4 billion. NAB is expected to post a 6.8 percent rise in annual cash earnings to A$5.8 billion on October 31. Commonwealth Bank, the nation's biggest lender by market value, is expected to report first-quarter cash profit on November 6 of around A$2.15 billion, up from A$1.85 billion from a year earlier, Morningstar analyst David Ellis has projected. It reported full-year cash profit of A$7.82 billion in August.
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