Banks' bad debt charges set to blow out again: Tripe
Most banks have been reporting falling bad debt charges lately and indicating they believe the worst fallout from the global financial crisis and domestic recession is behind them.
However, Massey University;s head of banking studies, David Tripe, says that, collectively, bank's non-performing loans are currently about 1% of the total compared with about half that five years ago.
"If you look at the trends, bad debt expense is hardly any higher than it was in 2007/08 but they have a lot more non-performing loans."
For example, ANZ Bank's charges against profit for bad loans in the nine months ended June 30 were $151 million while its total individually impaired assets were $1.47 billion and its loans 90 days past due but not impaired totalled another $246 million.
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