(10 March 2010 – Australia) A spokesperson for the Commonwealth Bank of Australia has told The Adviser that it plans to reduce the loan to value ratio on its new investment home loans from 90 percent to 80 percent.The spokesperson for the bank said that owner occupied home loans will not be affected by the changes, which take effect from Saturday March 20th, forming part of CBA’s responsible lending strategy.
Ross McEwan, head of retail banking, CBA, told The Herald Sun that the changes followed a comprehensive risk assessment of the bank’s A$270 billion home loan book.
The risk assessment showed that these were areas the bank needed to tighten in terms of credit quality and CBA views this as about improving the credit quality of the book, rather than an effort to haul in home lending.