Sub-prime to benefit big Australian banks
(19 September 2007 – Australia) A research note from investment house Merrill Lynch said that big Australian banks will benefit from softer competition because non-bank lenders will struggle to fund their mortgage books.
In the note, Mathew Davison, analyst, Merrill Lynch, said that Australian banks had little or no exposure to the US sub-prime mortgage market and the resulting problems.
The note added that there will not be funding cost pressures for big banks while the asset quality indicators remain reasonable.
There will be opportunities for the big banks to win market share from non-bank lenders, who may be forced to pass on higher lending costs to consumers.
Non-bank lenders such as Bluestone Group and Liberty Financial have already been affected by higher lending costs.
The note added that there will not be funding cost pressures for big banks while the asset quality indicators remain reasonable.
There will be opportunities for the big banks to win market share from non-bank lenders, who may be forced to pass on higher lending costs to consumers.
Non-bank lenders such as Bluestone Group and Liberty Financial have already been affected by higher lending costs.
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