According to the interim earnings reports issued to the media by our major banks – they have seen a significant drop in bad debts although home loan impairments are on the increase.
Total bad debt charges for the big four banks have decreased from $6.7 billion in the second half of the 2008/09 financial year to $4.5 billion in the latest half.
It is uncertain whether this trend will continue through the second half of 2010.
NAB’s bad and doubtful debt charge fell 32 per cent to $1.2 billion over the 12 months to March.
The bank’s gross impaired assets increased from $3.9 to $5.5 billion between March last year and September, an increase of 41 per cent. The growth rate slowed to five per cent in the latest half, as gross impaired assets grew from $5.5 to $5.8 billion.
The bank’s gross impaired assets plus loans 90 days past due as a percentage of gross loans and acceptances has risen from 1.3 to 1.8 per cent.
Westpac’s bad and doubtful debt charge rose from $1.5 billion in March last year to $1.7 billion in the September half but then fell 48 per cent to $879 million in the latest half.
ANZ’s bad debt charge rose from $1.4 billion in March last year to $1.6 billion in September and then fell 34 per cent to $1.1 billion in the latest half.
The value of ANZ’s gross impaired assets has increased by 19 per cent from $3.7 billion in March last year to $4.4 billion in September and then 20 per cent to $5.3 billion in the latest half. Gross impaired assets as a percentage of net advances have risen from 1.03 per cent to 1.53 per cent over the past year.
CBA’s bad debt charge fell from $1.9 billion in December 2008 to $1.4 billion in June last year and then fell to $1.38 billion in December 2009.