Commercial Property 101: Big four banks ratchet up commercial property exposure

Commercial Property 101: Big four banks ratchet up commercial property exposure
Commercial Property 101: Big four banks ratchet up commercial property exposure

The exposure of the big four banks to commercial property lending has further increased. 

Australia's four major banks contributed about 70 percent of the latest increased exposure to commercial property.

Analysis from CLSA, NAB has the highest percentage of gross loans to commercial property at 10.3 percent or about $60.2 billion.

Westpac is second at 8.2 percent, through less than a third of the 35 percent it had during the tumultuous early 1990s.

CBA sits at 7.2 percent and ANZ had the lowest exposure to commercial property.

Australia's banks saw their biggest quarterly increase in exposure to office towers during the December quarter, rising almost $3 billion to $74.56 billion, the largest quarterly change since the Australian Prudential Regulation Authority began the 2008 data series.

Australian banks increased their commercial property exposures by $5.46 billion in the December quarter to $244 billion.

Exposures in office accommodation make up 30 percent of all commercial property while retail property made up 23 percent.

There were increased exposures in every sector of commercial property except tourism assets, the Australian Financial Review noted.

Exposures in commercial residential and land developments rose by a collective $1.8 billion in the December quarter.

 

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

Tags: 
Banking Commercial Property

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