Xinhua, Sydney :
Australia’s major banks face soft profit growth and increased macroeconomic risks, according to research released by Fitch Ratings agency on Friday.
It noted Australian household debt remains high and may pose a risk to the banks’ asset quality in the event of a sharp interest- rate increase or higher unemployment.
“Fitch expects soft profit growth with revenue increases remaining under pressure due to asset competition, low interest rates and moderate credit growth relative to historical levels,” Fitch said.
“Fitch expects impairment charges to continue rising from cyclical lows, although low interest rates should limit asset-quality deterioration as long there is no significant external event.”
“Asset quality in some portfolios, such as resources, may continue to weaken, although the banks’ exposures to mining and dairy remain manageable relative to total exposures,” Fitch said.
Despite the news, all Australia’s major banks were having a good day on the ASX.
At 1:46 p.m. local time (AEST), ANZ was up 1.53 percent, the Commonwealth Bank of Australia gained 0.41 percent, the National Australia Bank was up 0.04 percent, and Westpac gained 1.30 percent.
Australia’s major banks face soft profit growth and increased macroeconomic risks, according to research released by Fitch Ratings agency on Friday.
It noted Australian household debt remains high and may pose a risk to the banks’ asset quality in the event of a sharp interest- rate increase or higher unemployment.
“Fitch expects soft profit growth with revenue increases remaining under pressure due to asset competition, low interest rates and moderate credit growth relative to historical levels,” Fitch said.
“Fitch expects impairment charges to continue rising from cyclical lows, although low interest rates should limit asset-quality deterioration as long there is no significant external event.”
“Asset quality in some portfolios, such as resources, may continue to weaken, although the banks’ exposures to mining and dairy remain manageable relative to total exposures,” Fitch said.
Despite the news, all Australia’s major banks were having a good day on the ASX.
At 1:46 p.m. local time (AEST), ANZ was up 1.53 percent, the Commonwealth Bank of Australia gained 0.41 percent, the National Australia Bank was up 0.04 percent, and Westpac gained 1.30 percent.
