CBA keeping close eye on housing investor loans as profits surge to $2.4b

0

Commonwealth Bank chief executive Matt Comyn says he would be wary about any resurgence in speculative borrowing by property investors, even though lending standards have so far remained strong as house prices have taken off.

As a stronger economy drove CBA’s first quarter profits sharply higher to $2.4 billion, Mr Comyn also said the bank had more than $10 billion in surplus capital, and its board could consider its capital management options. Analysts expect it will launch a major share buyback.

Loading...

Commonwealth Bank chief executive Matt Comyn. The bank said it had expanded in home loans, business loans, and deposits at a faster pace than the industry average during the quarter.Credit:Alex Ellinghausen

Banks are benefiting from the housing boom as loan growth accelerates, and Mr Comyn on Wednesday sought to hose down concerns about the market overheating, by emphasising the differences between now and the investor-led boom of the last decade.

Loading...

Mr Comyn said the bank had experienced strong demand from first home buyers and owner-occupiers, and he re-affirmed the lender’s expectation for price growth of about 10 per cent this year and 6 to 8 per cent next year. Mr Comyn said the state of the market was not concerning to CBA, but this could change if investor credit took off.

“Where it would become more concerning was if it was becoming concentrated in certain markets, more investor-driven, more speculation-driven, versus very clear incentives that are in place for good reasons to attract first home buyers to the market,” Mr Comyn said.

Loading...

“We think credit quality, credit standards across the industry, are not deteriorating, and we don’t expect them to.

“If credit growth starts to rapidly accelerate combined with investor lending increasing, that would certainly give cause for concern, but we revisit all of our settings and go through all of the detail about what we’re seeing every month.”

Loading...

Figures earlier this month showed a 12.7 per cent lift in new property investor loans in March, as new lending to first home buyers fell for the second month in a row. Mr Comyn said investor applications for loans from CBA had picked up, and the bank was “watching closely on a very targeted basis,” as this was a risk factor.

Mr Comyn praised the fiscal stimulus unveiled in Tuesday night’s budget, including an extension of $20.7 billion in business tax breaks, which he said would support a further lift in business investment.

Loading...

Stay connected with us on social media platform for instant update click here to join our  Twitter, & Facebook

We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.

Loading...

For all the latest Education News Click Here 

 For the latest news and updates, follow us on Google News

Loading...

Read original article here

Denial of responsibility! TechiLive.in is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Loading...
Leave a comment