From IBTimes
"Take Bank of Queensland, for example. Its losses are concentrated in the Gold Coast. Even the most hard-headed of housing Pollyannas would concede prices there are falling. But losses in one market are going to lead to lower lending everywhere. The bank will be forced to raise its loan loss provisions and grow less quickly (or contract) in places like Victoria and New South Wales.
And remember BOQ is not even one of the Big Four. Smaller banks can't compete with the Big Four. They have fewer sources of funding and less margin for lending error. That's why the Big Four banks have actually increased their share of mortgage market to over 85% since 2008. The risk of falling house prices is now heavily concentrated in a small number of very large banks, banks that must weigh risk aversion in lending versus the need to grow earnings."
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