APRA releases quarterly authorised deposit-taking institution statistics for December 2020

The Australian Prudential Regulation Authority (APRA) has released the Quarterly Authorised Deposit-taking Institution (ADI) Performance and the Quarterly Authorised Deposit-taking Institution Property Exposures publications for the quarter ending December 2020.

The ADI industry was resilient in the December quarter, with high capital ratios and strong liquidity and funding positions. Industry profitability improved over the quarter due to reduced charges for bad or doubtful debts. Overall growth in loans and advances was slow, although housing lending grew moderately, supported by lending to owner-occupiers. Despite moderately increased new lending at higher loan-to-valuation ratios and debt-to-income ratios, available indicators do not suggest any material relaxation in housing lending standards, with these metrics remaining broadly in line with historical averages. Key measures of asset quality were stable thanks to a range of measures providing support to borrowers, but the outlook is uncertain as support measures change over coming quarters.

The Quarterly ADI Performance publication contains information on ADIs’ financial performance, financial position, capital adequacy, asset quality, liquidity and key financial performance ratios.

Key statistics for ADIs1 for the December 2020 quarter were:

December 2019

December 2020

Change

Net profit after tax (year-end)

$33.7 billion

$21.9 billion

-35.0%

Total assets

$4,981.5 billion

$5,302.4 billion

+6.4%

Total capital base

$329.0 billion

$368.9 billion

+12.1%

Total risk-weighted assets

$2,089.6 billion

$2,100.6 billion

+0.5%

December 2019

December 2020

Change

Capital adequacy ratio

15.7%

17.6%

+1.9 percentage points

Minimum liquidity holdings ratio

16.2%

20.2%

+4.0 percentage points

Liquidity coverage ratio

131.5%

141.8%

+10.3 percentage points

Key non-performing loans statistics for ADIs for the quarter were:

December 2019

December 2020

Change

Impaired assets and past due items2

$31.0 billion

$36.4 billion

+17.1%

Total provisions

$12.9 billion

$14.6 billion

+13.2%

The Quarterly ADI Property Exposures (QPEX) publication contains data on commercial and residential property exposures, including detail on mortgage lending such as risk indicators, serviceability characteristics and non-performing loans.

Key statistics for ADIs conducting residential mortgage lending for the quarter were:

Residential mortgages – credit outstanding

December 2019

December 2020

Change

Owner-occupied

$1,101.2 billion

$1,177.6 billion

+6.9%

Investment

$615.5 billion

$609.6 billion

-1.0%

Non-performing term loans

$15.8 billion

$18.8 billion

+19.2%

Interest-only

$329.9 billion

$265.9 billion

-19.4%

LVR ≥ 95

$20.2 billion

$18.7 billion

-7.7%

Residential mortgages – new loans funded

December 2019 quarter

December 2020 quarter

Change

Owner-occupied

$71.9 billion

$88.9 billion

+23.6%

Investment

$32.0 billion

$36.4 billion

+13.7%

Interest-only

$18.7 billion

$24.6 billion

+31.2%

LVR ≥ 95

$1.6 billion

$2.1 billion

+27.4%

Third-party originated

$54.3 billion

$69.5 billion

+28.0%

Debt-to-income ≥ 6x

$17.1 billion

$21.6 billion

+26.3%

Key commercial property statistics for ADIs for December 2020 were:

Commercial property

December 2019

December 2020

Change

Total commercial property limits

$342.4 billion

$359.2 billion

+4.9%

Total commercial property exposures

$290.0 billion

$302.7 billion

+4.4%

Copies of the December 2020 publications are available at: Quarterly authorised deposit-taking institution statistics.

Footnotes:

1 Excluding ADIs that are not banks, building societies or credit unions.

2 Repayment deferrals may have dulled the anticipated deterioration in asset quality.

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