"It (Australian home loans) is certainly not as attractive as it used to be," ANZ CEO Shayne Elliott said after the country's No. 4 lender reported earnings from its institutional arm overtook home lending.
"Margins have been declining for 30 years, there's been a few blips along the way, but we think the downward trend is going to resume," he added, referring to mortgages. Australia's "big four" - ANZ, Commonwealth Bank of Australia (CBA) , National Australia Bank Ltd (NAB) and Westpac Banking Corp - control three-quarters of the mortgage market where the value of new loans fell 29% last year. The housing market is struggling as Australia's central bank raised rates by 375 basis points in the past year to tame inflation, limiting borrowing capacity. Competition in a stagnant mortgage market has become so fierce that some banks are offering cash payments to lure borrowers.
Inflation still sits at 7.0%, well ahead of Reserve Bank of Australia's 2–3% target range, meaning more interest rate hikes are possible.
"It's difficult to see us going back to a low-inflation, low
interest rate environment for some time," said Elliott told
journalists on a call.
Macquarie Group posted another record profit
primarily driven by a strong performance from its commodities
trading businesses.
CEO Shemara Wikramanayake said the bank's capital surplus of
A$12.6 billion ($8.5 billion), up from $A10.7 billion in the
previous financial year, places it in a good position to tap
other opportunities given global uncertainties.
National Australia Bank Ltd , the country's No. 2
lender, which reported its earning on Thursday also said the
company would focus on expanding business in areas more
profitable than mortgages.
($1 = 1.4841 Australian dollars)
(Reporting by Praveen Menon and Byron Kaye in Sydney; Editing
by Lincoln Feast.)
