The Australian Prudential Regulation Authority (APRA) has released the Quarterly Authorised Deposit-taking Institution (ADI) Performance and the Quarterly ADI Property Exposures publications for the quarter ending June 2021.
Measures of ADI industry resilience were strong in the June 2021 quarter. Across the industry, ADIs held strong capital and liquidity positions. Industry profitability improved over the past year, while non-performing loans remained broadly stable. However, the outlook appears uncertain, given the challenges currently faced by the industry from the delta variant of COVID-19 and ongoing lockdowns. Government stimulus and APRA's second round of concessionary treatment for loan repayment deferrals should provide some support.
In residential mortgage lending, the share of new lending with high debt-to-income ratios increased over the quarter, continuing to be influenced by the low interest rate environment and increasing house prices. Other measures of higher-risk residential mortgage lending fell, including the share of new lending with high loan-to-valuation ratios. Key measures of asset quality remain strong, although this may be impacted by recent lockdowns and the expected impact on borrower's ability to service their loans.
Key statistics for ADIs1 for the June 2021 quarter were:
June 2020 |
June 2021 |
Year on Year Change |
|
|---|---|---|---|
Net profit after tax (year-end) |
$26.2 billion |
$32.3 billion |
+23.5% |
Total assets |
$5,328.8 billion |
$5,382.7 billion |
+1.0% |
Total capital base |
$347.3 billion |
$387.1 billion |
+11.5% |
Total risk-weighted assets |
$2,130.3 billion |
$2,106.3 billion |
-1.1% |
Total capital ratio |
16.3% |
18.4% |
+2.1 percentage points |
Minimum liquidity holdings ratio |
19.1% |
18.6% |
-0.5 percentage points |
Liquidity coverage ratio |
137.5% |
132.6% |
-4.9 percentage points |
Impaired assets and past due items |
$39.0 billion |
$37.5 billion |
-4.0% |
Key statistics for ADIs conducting residential mortgage lending for the quarter were2:
June 2020 |
June 2021 |
Year on Year Change |
|
|---|---|---|---|
Residential mortgages - credit outstanding |
$1,847.6 billion |
$1,935.2 billion |
4.7% |
of which: Owner-occupied |
$1,135.4 billion |
$1,234.1 billion |
8.7% |
of which: Investment |
$612.6 billion |
$613.3 billion |
0.1% |
Residential mortgages - credit outstanding |
June 2020 (share of total) |
June 2021 (share of total) |
Year on Year Change |
|---|---|---|---|
Owner-occupied |
63.2% |
65.2% |
+2.0 percentage points |
Investment |
34.1% |
32.4% |
-1.7 percentage points |
Interest-only |
16.2% |
12.8% |
-3.4 percentage points |
LVR ≥ 90 per cent |
4.8% |
4.6% |
-0.2 percentage points |
Non-performing |
1.1% |
1.0% |
-0.1 percentage points |
June 2020 |
June 2021 |
Change |
|
|---|---|---|---|
New residential mortgage loans funded during the quarter |
$111.1 billion |
$156.2 billion |
40.5% |
New residential mortgage loans funded during the quarter |
June 2020 (share of total) |
June 2021 (share of total) |
Change |
|---|---|---|---|
Owner-occupied |
69.0% |
70.6% |
+1.5 percentage points |
Investment |
29.1% |
27.8% |
-1.4 percentage points |
Interest-only |
18.2% |
17.4% |
-0.8 percentage points |
LVR ≥ 90 per cent |
9.2% |
8.6% |
-0.6 percentage points |
Debt-to-income ≥ 6x |
16.0% |
21.9% |
+5.8 percentage points |
Key commercial property statistics for ADIs for June 2021 were:
June 2020 |
June 2021 |
Year on Year Change |
|
|---|---|---|---|
Total commercial property limits |
$355.8 billion |
$369.1 billion |
3.7% |
Total commercial property exposures |
$300.8 billion |
$312.5 billion |
3.9% |
The Quarterly ADI Performance publication contains information on ADIs' financial performance, financial position, capital adequacy, asset quality, liquidity and key financial performance ratios.
The Quarterly ADI Property Exposures publication contains data on commercial and residential property exposures, including detail on risk indicators, serviceability characteristics and non-performing loans.
The June 2021 publications are available on the APRA website at: Quarterly authorised deposit-taking institution statistics.
Footnotes:
1. Excluding ADIs that are not banks, building societies or credit unions.
2. See Explanatory Notes of QPEX for details of share calculations
