Property the foundation for banks’ 2003 results
(Australia) Australia’s booming property market and strong domestic spending have underpinned the major banks’ 2003 results, according to a Standard & Poor’s report.
The report found that solid loan volume growth in the home mortgage sector, cost containment and moderating bad debt expenses were the key drivers for Australia’s domestic growth.
S&P’s credit analyst Peter Sikora said the ratings agency’s first industry report card on Australian banks showed domestic growth compared favourably with international markets.
'Cash earnings have continued to improve, adding to the already impressive performance track record at all the major banks, despite the ongoing tightening of net interest margins since the late 1990s, a scattering of loan loss provisions against some high-profile corporate collapses, and a range of noncash write-offs relating to accounting adjustments and asset revaluations,' Sikora said.
He said the housing cycle would slowly run out of steam during the second half of fiscal 2003 and into 2004, contributing to some moderation in growth opportunities within the sector.
However, the major banks expect to see a moderate upswing in business investment to support growth in business lending, providing impetus for revenue growth.
The banks have indicated that they will be looking to improve their wealth management businesses and refocus on customer satisfaction and outsourcing arrangements.
S&P’s credit analyst Peter Sikora said the ratings agency’s first industry report card on Australian banks showed domestic growth compared favourably with international markets.
'Cash earnings have continued to improve, adding to the already impressive performance track record at all the major banks, despite the ongoing tightening of net interest margins since the late 1990s, a scattering of loan loss provisions against some high-profile corporate collapses, and a range of noncash write-offs relating to accounting adjustments and asset revaluations,' Sikora said.
He said the housing cycle would slowly run out of steam during the second half of fiscal 2003 and into 2004, contributing to some moderation in growth opportunities within the sector.
However, the major banks expect to see a moderate upswing in business investment to support growth in business lending, providing impetus for revenue growth.
The banks have indicated that they will be looking to improve their wealth management businesses and refocus on customer satisfaction and outsourcing arrangements.
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