By Lewis Jackson and Scott Murdoch
SYDNEY, March 17 (Reuters) - An A$300 billion ($201.21
billion) refinancing task for Australia's biggest banks is about
to get harder, say analysts, as appetite for new debt shrinks
across global markets roiled by concerns about bank stability
and liquidity.
Australia's biggest banks, Westpac , ANZ Group
Holdings , Commonwealth Bank and National
Australia Bank are refinancing roughly A$300 billion
worth of funding in fiscal 2023 and 2024, the largest two-year
tally in nearly a decade, according to Macquarie research.
The expiry over the next 18 months of roughly A$130 billion
in near-zero interest rate loans from the central bank during
the pandemic had already made the task more difficult.
But after the past week's failures and liquidity
crunches at banks in the United States and Europe, refinancing
will become even pricier and damaging to margins, according to
Credit Suisse analyst Jarrod Martin.
"When there are global concerns the cost of raising debt
increases and that's what we've seen in the last week," he said
on Friday. "Now major banks don't have to hit markets
everyday... but ultimately banks can't stay out of the market
forever."
Refinancing today would add extra 5 to 10 basis points to
banks' costs versus a week and a half ago, he added.
The rise in funding costs underscores how the fallout from
the collapse of Silicon Valley Bank and the run on Credit Suisse
is hurting even those banks where there is little risk of a
similar liquidity or solvency crisis.
Fears of a global banking crisis eased on Friday after an
emergency intervention from the Swiss National Bank provided
Credit Suisse on Thursday with $54 billion to shore up
liquidity.
In the United States, a group of Wall Street banks the same
day deposited as much as $30 billion into troubled lender First
Republic Bank , sending its shares 10% higher.
Decisive action from regulators means an extended freeze in
wholesale markets is unlikely, said one analyst who could not be
named as they were not permitted to speak with media, but the
rise in funding costs would hit bank margins already under
pressure from greater competition and rising deposit rates.
Australia's big four banks have already raised roughly A$90
billion thanks to a flurry of issues this year, according to
research from Macquarie published on Friday.
However rising funding costs will mean finishing the task
will hit margins to the tune of between 8 and 10 basis points
over the next three years, the note added.
($1 = 1.4910 Australian dollars)
(Reporting by Lewis Jackson and Scott Murdoch; Editing by Simon
Cameron-Moore)
@lewjackk))
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