Financial Stability Review – March 2005 List of tables

Boxes

  • Table A1: Distribution of Household Debt
  • Table A2: Households with Owner-occupier Housing Debt(a)
  • Table A3: Highly Indebted Households(a)
  • Table D1: Henderson Poverty Line

Article

How Do Australian Businesses Raise Debt?

Table 1: World GDP Growth
Year-average, per cent(a)
2004 2005 2006
Estimate Consensus forecasts
(March 2005)
United States 4.4 3.7 3.4
Euro area 2.0 1.6 2.0
Japan 2.7 0.9 1.7
China 9.5 8.4 7.8
Other east Asia(b) 5.8 4.5 4.9
Australia's trading partners(c) 4.8 3.5 3.7
World 5.0 4.3 4.2

(a) Aggregates weighted by GDP at PPP exchange rates unless otherwise specified
(b) Weighted using market exchange rates
(c) Weighted using merchandise export shares

Sources: CEIC; Consensus Economics; IMF; RBA; Thomson Financial

Table 2: Household Debt Growth
Annual average, per cent
Dec 1989 to
Dec 2001
Dec 2001 to
Dec 2004
Australia 12.4 17.5
Canada(a) 6.2 9.0
Ireland(a)(c) 16.2 29.0
New Zealand(a) 10.0(d) 13.5
Spain(a) 10.0 16.2(b)
UK(a) 6.8 14.1(b)
US 7.2 10.3

(a) Includes unincorporated enterprises
(b) To September 2004
(c) Residential mortgage credit only; data are from March 1991
(d) From December 1990

Sources: National sources

Table 3: House Prices
Year-ended percentage change
2003 2004
ABS APM CBA REIA ABS APM(a) CBA REIA(a)
Sydney 15.5 23.2 19.0 10.8   0.0 −6.9 −15.7 −10.2
Melbourne 12.5 17.0 25.0 15.5   −1.5 −8.2 −7.5 −1.2
Brisbane 35.1 41.7 43.9 35.8   8.4 4.9 −0.8 3.7
Adelaide 24.2 20.6 18.5 28.1   8.8 11.3 7.0 10.7
Perth 22.2 20.5 34.5 18.4   8.9 9.3 3.1 8.1
Canberra 25.3 25.9 48.1 31.8   0.2 −1.9 −6.3 −5.4
Australia 18.9 23.1 26.2 16.3   2.7 −2.9 −7.2 −2.9

(a) Preliminary

Sources: ABS; APM; CBA; REIA

Table 4: Household Assets
September quarter 2004
Level Share of total Annual growth
Per cent
$ billion Per cent Three
quarters to
Sep 2004
Average
Dec 1998 to
Dec 2003
Dwellings 2,623 61.2 4.1(a) 14.7
Consumer durables 148 3.5 3.4 4.5
Financial assets(b) 1,515 35.4 10.8 7.3
Superannuation and life offices(c) 791 18.5 13.3 8.0
– Shares and other equities 273 6.4 12.0 5.9
– Currency and deposits 365 8.5 8.7 7.7
– Other 86 2.0 −4.2 4.2
Total 4,286 100.0 6.4 11.4

(a) The rise in measured dwelling assets over this period, which occurred despite falls in median national capital city house prices, reflects use of a broader dwellings price measure and an increase in the dwelling stock.
(b) Includes unincorporated enterprises.
(c) Includes unfunded superannuation claims.

Sources: ABS; RBA

Table 5: Full-year Profit Results
Five largest banks, consolidated
2003 2004 2003 2004
Per cent of average assets $b $b
Income
Net interest income 2.03 1.95 22.5 24.2
Net income from
wealth management
0.27 0.35 3.0 4.3
Other non-interest income 1.26 1.18 14.0 14.7
Expenses
Operating expenses 1.85 1.85 20.5 22.9
Bad and doubtful debts 0.19 0.18 2.1 2.3
Goodwill amortisation
and revaluations
0.10 0.06 1.1 0.8
Profit
Net profit before tax 1.42 1.39 15.8 17.2
Net profit after tax 1.00 0.99 11.2 12.3
Sources: Banks' annual reports
Table 6: Banks' Australian Commercial Property Exposures
Per cent, September 2004
Type of exposure Growth
Year to
September 2004
Share of total
commercial
lending
Impaired assets
Share of
commercial
property exposures
Office 2 9 0.1
Retail 12 7 0.0
Industrial 9 3 0.1
Residential 16 10 0.3
Tourism and leisure 13 1 1.2
Other 23 4 0.6
Total 11 35 0.2
Source: APRA
Table 7: Australian Banks' Foreign Exposures
As at September 2004, ultimate risk basis
Country Total Of which:
Level Share Local Cross-
border
$b Per cent $b $b
New Zealand 158.5 44.5   146.6 11.8
United Kingdom 92.7 26.0   70.3 22.4
United States 30.8 8.6   16.0 14.8
Other developed countries 48.6 13.6   9.7 38.9
Developing countries 12.4 3.5   6.1 6.3
Offshore centres(a) 12.7 3.6   5.4 7.4
Other 0.6 0.2   0.2 0.4
Total 356.3 100.0   254.2 102.1
Per cent of total assets 29.6     21.1 8.5

(a) Includes Hong Kong and Singapore

Sources: APRA; BIS

Table 8: Market Risk(a)
Per cent of shareholders' funds, four largest banks
2003 2004
Interest rate 0.05 0.03
Foreign exchange 0.02 0.02
Other(b) 0.02 0.03
Diversification benefit −0.02 −0.02
Total 0.06 0.06

(a) Value at risk calculated using a 99 per cent confidence interval and one-day holding period.
(b) Other market risks include commodity, equity, prepayment, volatility and credit spread risk.

Sources: Banks' annual reports; RBA

Table 9: Long-term Ratings of Australian Banks
Standard
& Poor's
Moody's Fitch
Adelaide Bank BBB+ Baa1 na
AMP Bank A− A3 na
Arab Bank na Baa3 BBB+
Australia and New Zealand Banking Group AA− Aa3 AA−
Bank of Queensland BBB Baa3 BBB
BankWest (Bank of Western Australia) A+ A1 na
Bendigo Bank BBB+ na BBB+
Commonwealth Bank of Australia AA− Aa3 AA
ING Bank (Australia) AA− Aa2 na
Macquarie Bank A A2 A+
National Australia Bank AA− Aa3 AA
St George Bank A A2 A+
Suncorp-Metway A A2 A
Westpac Banking Corporation AA− Aa3 AA−
Sources: Fitch; Moody's; Standard & Poor's
Table 10: Moody's Weighted-average Bank Financial Strength Index(a)
December 2004
Australia 72.5
Canada 75.0
France 72.7
Germany 47.2
Hong Kong SAR 62.3
Japan 20.6
Malaysia 35.2
Netherlands 84.2
Singapore 74.7
United Kingdom 83.3
United States 77.0

(a) Constructed according to a numerical scale assigned to Moody's weighted-average bank ratings by country. Zero and 100 indicate lowest and highest possible average ratings, respectively.

Sources: IMF; Moody's

Table A1: Distribution of Household Debt
Per cent
Income decile By value By number
Total
debt
Property debt Property
debt of
investors
Total
debt
Property
debt
Property
debt of
investors
1–4 (lowest) 14 12 8   28 19 11
5–7 27 28 17   33 33 24
8–10 (highest) 59 60 75   39 48 65
Source: HILDA 2002, Release 2.0
Table A2: Households with Owner-occupier Housing Debt(a)
Income decile Median owner-
occupier
debt-servicing ratio
Ahead of schedule
on debt
repayments(b)
Median liquid
assets as share of
owner-occupier debt
Per cent Per cent of decile Per cent
3 34 51 5
4 31 55 4
5 24 53 5
6 22 57 10
7 21 60 7
8 20 64 10
9 16 66 16
10 14 58 22

(a) Sample differs across columns
(b) Primary mortgage repayments only

Source: HILDA 2002, Release 2.0

Table A3: Highly Indebted Households(a)
Per cent of each group of households, unless otherwise Indicated
Households with owner-occupier
mortgage debt
Income deciles
Total households(b)
3–4 5–7 8–10 All(b)
Debt-servicing ratio > 50% 18.4 7.5 3.1 6.7 2.4
Property-gearing ratio > 75% 10.7 15.5 9.2 11.7 4.2
Debt-servicing ratio > 50%
and property-gearing ratio > 75%
1.1(c) 1.4(c) 0.8(c) 1.1 0.4
Memo items
Per cent of all households with
owner-occupier mortgage debt
12.6 34.6 47.3
After-tax income (range) $18,721 $30,981 $55,925    
−30,977 −55,909 and above

(a) Excludes those households not reporting debt-servicing costs
(b) Excludes households in the lowest two income deciles
(c) Estimate based on a sample of 15 or less; hence, the standard error could be quite large

Source: HILDA 2002, Release 2.0

Table D1: Henderson Poverty Line
Excluding housing costs, September 2004
Income unit(a) $ per week
Couple – no dependants 310.75
Couple + 1 386.27
Couple + 2 461.80
Couple + 3 537.32
Single person – no dependants 213.75
Single + 1 293.57
Single + 2 369.09
Single + 3 444.61

(a) With household head employed

Source: Melbourne Institute

Table 1: Australian Businesses' Sources of Debt Finance(a)
350 largest listed businesses, A$ billion
June 1999 June 2004
Higher rated(b) Lower rated(c) Unrated Total Higher rated(b) Lower rated(c) Unrated Total
Non-intermediated
debt
11.4 11.9 1.0 24.3   27.5 22.4 8.9 58.8
Domestic bonds 1.5 0.9 0.3 2.7   6.1 3.5 2.5 12.1
– Unwrapped 1.5 0.9 0.3 2.7   6.1 2.2 0.0 8.3
– Credit wrapped 0.0 0.0 0.0 0.0   0.0 1.4 2.5 3.9
Offshore bonds 9.9 10.2 0.0 20.1   19.7 13.4 2.6 35.8
– Private placements 1.3 2.5 0.0 11.5   2.4 9.3 2.6 14.3
– Other 8.7 7.7 0.0 8.7   17.3 4.1 0.0 21.4
Hybrids 0.0 0.8 0.7 1.5   1.7 5.5 3.8 11.0
– Domestic 0.0 0.3 0.7 1.1   1.7 3.1 3.8 8.6
– Offshore 0.0 0.4 0.0 0.4   0.0 2.4 0.0 2.4
Intermediated debt 34.8 30.4 46.2 111.4   19.5 33.7 35.3 88.5
Total 46.3 42.2 47.2 135.7   47.0 56.2 44.2 147.4

(a) Domestic short-term securities were excluded from non-intermediated debt.
(b) Companies rated A− or higher
(c) Companies rated BBB+ or lower

Sources: ASX; RBA; Salomon Smith Barney; UBS Australia Ltd.

Table 2: Characteristics of Businesses' Debt Security Issues
2002 to 2004
Domestic bonds Offshore bonds Hybrids(a)
Unwrapped Credit wrapped US private placements Other
Total issuance (A$b) 11.4 8.8   23.4 16.7   7.8
Number of issuers 41 16   49 27   49
Number of issues 61 20   55 62   55
Average size (A$m) 190 440   430 270   140
Average maturity (years) 5 8   11 6   5

(a) Offshore hybrids are excluded owing to the small sample.

Sources: ASX; RBA; Salomon Smith Barney; UBS Australia Ltd.

Table 1: Features of Hybrid Securities Issued in Australia
Type Key features
Income securities Perpetual securities with regular interest or coupon payments. They are only redeemable at the option of the issuer.
Perpetual step-up securities Similar to income securities, except that the interest payment on the security increases if the issuer does not redeem the security on a certain date.
Converting preference shares The security converts automatically into ordinary shares on the maturity date.
Convertible preference shares/notes At the maturity date, the investor can choose whether to convert the security into ordinary shares or receive cash.
Reset convertible preference shares/notes The issuer has the option to change the terms or redeem the securities on a predetermined date. The investor has the option to accept the new terms of the security, or to request an exchange. If an exchange is requested, the issuer decides whether it is for ordinary shares or cash.