Westpac looks on the bright side of credit crunch

The chief of Westpac, David Morgan, warned yesterday that the future of Australian interest rates depends on how long the US subprime housing loan crisis continues and whether it tips the North American economy into recession. Dr Morgan said that local banks like Westpac were well placed to take advantage of the difficulties being experienced by some non-bank lenders as borrowers have “no appetite” for some of the more exotic loan products previously offered. Westpac assured the market that it has minimal exposure to the global credit problems even though it does have funding commitments to one American lender with around $120 million of subprime loans on its books.