Banks accused of lending too much
(19 April 2011 – Australia) A Bank of America-Merrill Lynch (BAML) report has said the major banks are lending too much to Australian consumers and underestimating the cost of living.
The report states the banks are too keen to lend and have relaxed customer criteria in efforts to boost market share, but this could lead to tighter lending standards in the long run to avoid an increase in bad loans.
BAML found that the Commonwealth Bank, Australia's largest bank and home lender, was the most conservative, ahead of Westpac and NAB, while ANZ was the most aggressive based on how much it would lend.
The analysis showed that the Australian bank’s estimates of cost of living expenses, excluding housing were projected as A$1208 for a single person and A$1708 for a couple per month – seven percent below mainstream forecasts.
The internationally recognised Poverty Index projects a couple’s expenditure at $1814 per month.
BAML found that the Commonwealth Bank, Australia's largest bank and home lender, was the most conservative, ahead of Westpac and NAB, while ANZ was the most aggressive based on how much it would lend.
The analysis showed that the Australian bank’s estimates of cost of living expenses, excluding housing were projected as A$1208 for a single person and A$1708 for a couple per month – seven percent below mainstream forecasts.
The internationally recognised Poverty Index projects a couple’s expenditure at $1814 per month.
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