SYDNEY, July 12 (Reuters) – Two top Australian banks said the number of home loan customers missing repayments remained below pre-COVID levels as a spike in living costs slows their discretionary spending, a sign that concerns of widespread financial distress may not materialise.
After 400 basis points of interest rate hikes in 14 months, the fastest tightening in a generation in the country, economists have warned one million customers with expiring fixed-rate mortgages would struggle as their loans reverted to higher variable rates from 2023, a scenario widely referred to as the “mortgage cliff”.
But the CEOs of National Australia Bank (NAB.AX) and ANZ Group (ANZ.AX), the No.3 and No.4 lenders, told a parliamentary hearing on Wednesday that they were seeing only a slight increase in borrower stress in the A$2 trillion ($1.34 trillion) mortgage market.
“We have been pleasantly surprised at the resilience that has been shown to date,” NAB CEO Ross McEwan told the House of Representatives economics committee hearing which bank bosses are required to face periodically.
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Source: www.reuters.com
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