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Stable outlook on Australia's banking sector in 2016 - Fitch Ratings

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 18, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Bali) - Fitch Ratings has maintained a stable outlook on Australia's banking sector in 2016.

    Headlines

    Expect strengthened capitalisation and recently tightened underwriting standards to offset slower profit growth and modest asset-quality pressure

    Profit growth likely to slow due to ongoing asset competition, higher funding costs, and a modest increase in loan-impairment charges

    Australia's household debt is likely to remain high in 2016, making borrowers sensitive to increased unemployment and higher interest rates

    Expect house-price growth to moderate

    Economic growth is likely to benefit from stronger household spending, which could either reduce Australia's savings rate or increase household debt

    Unemployment rate is expected to remain relatively stable in 2016 before modestly improving in 2017

    Expects Australia's credit cycle to turn in 2016, although any weakening in asset quality should remain manageable

    Expect banks to continue to strengthen their capital positions
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