St George, BT wind back margin lending

St George Bank, now owned by Westpac, is cutting the gearing ratios allowed on its margin loans from forty per cent to zero on more than forty investment funds, effectively banning margin loan investors from buying into those funds. BT financial, also owned by Westpac, is believed to be preparing to make the same move.

St George advised customers that the new rules would come into effect on July 10 and recommended that ‘clients monitor their portfolios in light of these new changes.' Margin loan investors with money invested in the ‘banned' funds will get a margin call on or after the 10th of July.

Those funds include the AMP Cap Invest Enhanced Yield Fund Class A, Centro Direct Property Fund, Challenger High Yield IDPS, Macquarie Direct property Fund and others.

Source: The Australian Financial Review