Westpac expects more consumer loans to turn bad in second half

Font size :
Analysts were disappointed by Westpac's bad debt charge increasing to 21 basis points, up from only 13 points in the second half of 2015. Pointing to mortgage and personal loan delinquencies as the problem, Westpac also expects bad consumer loans to rise in the second half due to housing activity easing and tighter credit standards.

Westpac's assets are comprised of 61 per cent mortgages, 13.3 per cent business loans, 9.6 per cent institutional banking, and 3.7 per cent consumer loans. Its actual mortgage loss rate is two basis points or $35 million, up by $3 million compared to the last half.

Yet Westpac chief executive Brian Hartzer assured investors that the problems are largely contained in areas reliant on the resources industry.

"While there have been a small number of large firms experiencing difficulties during the first half, these have been predominantly due to company-specific issues that have been, in some cases, exacerbated by the mining cycle," he said. "Company balance sheets are generally in good shape—having used lower interest rates to pay down debt—and levels of stress remain low."

Around the country, 90+ days delinquencies including impaired mortgages rose from 45 basis points in the September half to 55 basis points this half. Still, Hartzer believes that other aspects of the Australian economy are encouraging.

"The recent firming of commodity prices, solid employment growth—particularly in the services sectors—and ongoing low interest rates all support that outlook," he said. "We also see signs of moderating housing investment, although housing fundamentals remain in good shape."

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan

Mortgage News and Articles

How to tell when a housing market is cooling How to tell when a housing market is cooling

You need to check clearance rates, listings, and the price gap, among other factors Read more

Growing demand for green apartments in Sydney Growing demand for green apartments in Sydney Both owner-occupiers and investors favour eco-friendly buildings for their energy-saving features and reduced environmental footprint ... Read more

Are property investors as rich as they appear? Are property investors as rich as they appear? A multi-property portfolio doesn’t guarantee easy millions ... Read more

Be proactive about getting a better mortgage deal Be proactive about getting a better mortgage deal Apathy could be costing you a considerable amount of money over the lifespan of your loan ... Read more

More mortgage news and articles

Sponsored Links

Monday, Sep 25, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords