Financial Stability Snapshot 9 April 2020

 

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COVID-19 Pandemic

Economic growth is unstable.

Financial markets

Highly volatile. Risky asset prices.

Substantial policy support

Fiscal Monetary Prudential

Australian banks resilient

Capital high, Common Equity Tier 1 (CET1) ratio is at 11.3 per cent. Liquidity ample, liquidity coverage ratio (LCR) greater than 130%.

Household debt

Household debt is high (% of HHDY) at 187%. But large prepayment buffers – 50% of mortgages > 6 months

Business income

Business income is low. But gearing low at 20%. Liquidity is high at 91%.

Non-performing loans

Non-performing loans are low but will rise NPL by 1%.

Housing risks low

Negative equity is at 3%.

Commercial property risks are high

Share of banks' assets are low at 3%.