Banks fatten up for lean times ahead
Banks are enjoying rising profit margins and less competition from non-bank lenders says a new report from Infochoice. Home repossessions are also rising to a new record of 2,797 in the year to June 30. Bankruptcies are up to a new record of 1,600 per quarter in Victoria. Two million Australians are behind in their home loan repayments. Home sales dropped 20 per cent in the quarter to June compared with one year earlier. BNP Paribas says home prices in Australia are overvalued and will drop 15 to 20 per cent next year. 29 per cent of all home loans sold are refinanced loans, up from 5 per cent in 1991. Real estate agents say prices have dropped 10 per cent already this year. Sales were down 4,000 from 17,500 last year to 13,500 this year in Victoria. London economic researchers say structural problems in Australia's banking system are now coming to the fore. Lombard Street Research said Australia's current account deficit was worrying and warned of a recession.
Source: Sunday Herald Sun