Tuesday, 5 March 2013

Oz Banks face headwinds

...Fitch Ratings says a likely modest weakening in Australian banks' operating environment during 2013 is unlikely by itself to result in negative rating action. A more severe downturn could drive negative action although this is not the agency's base case. In a report published today, Fitch says it expects Australian banks' profit growth to come under pressure in 2013, due to likely subdued credit growth and a potential rise in impairment charges. However, loan losses should easily be absorbed by pre-impairment operating profits, as Australian banks are, and should remain, among the most profitable in the world... (here)

...S&P said that the outlook for the AA- rating held by the big four banks is “stable”, but warned there was a greater chance of a downgrade in 2013 than an upgrade....
“While our most likely scenario for the Australian banking sector in 2013 is continued ratings stability, we note that there remains downside risk, and we cannot discount the possibility of negative rating momentum,” the S&P report said, according to the AFR....(here)

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