Defaulting coming back into fashion
Many more personal loan customers are expected to start defaulting on loans over the next year according to ANZ chief Mike Smith who says lending losses will stay high into 2010, with bad debts moving from highly leveraged companies into the commercial sector and higher-risk personal customers.
Bad debts are more of a problem for ANZ, its balance of non-performing loans rose by nearly $1 billion to $7.2 billion in the September quarter, than other banks such as Westpac, where exposure to non-performing loans fell some $400 million to $6.1 billion, according to UBS.
More than seven thousand companies collapsed in the year to September, up 12 per cent on last year according to ASIC.
Source: Sydney Morning Herald