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 December 2021.
Measures of ADI industry resilience remained strong in the December 2021 quarter despite the emergence of the Omicron variant in the latter half of the quarter. Industry net profit improved over the past year returning to pre-pandemic levels, up $15.6 billion, partly driven by the release of provisions raised during the earlier stages of the pandemic. Charges for bad or doubtful debts were down $13.5 billion over the year. ADIs’ capital and liquidity positions were strong and non-performing loans decreased.
Residential mortgage lending remained strong, with both the stock of outstanding loans and new loans funded increasing over the December 2021 quarter. New lending to investors outpaced new lending to owner-occupiers for the quarter. The share of new lending with high debt-to-income ratios increased to 24.4 per cent for the December quarter, compared to 23.8 per cent in the September quarter. However, the rate of growth in the quarter slowed.
Key statistics for ADIs1 for the December 2021 quarter were:
December 2020 | December 2021 | Year on Year Change | |
|---|---|---|---|
Net profit after tax (year-end) | $21.9 billion | $37.6 billion | +71.4% |
Total assets | $5,302.3 billion | $5,622.3 billion | +6.0% |
Total capital base | $369.0 billion | $391.5 billion | +6.1% |
Total risk-weighted assets | $2,100.6 billion | $2,191.3 billion | +4.3% |
Total capital ratio | 17.6% | 17.9% | +0.3 percentage points |
Minimum liquidity holdings ratio | 20.2% | 19.0% | -1.2 percentage points |
Liquidity coverage ratio | 141.5% | 139.4% | -2.1 percentage points |
Impaired assets and past due items | $36.4 billion | $32.7 billion | -10.1% |
Key statistics for ADIs conducting residential mortgage lending for the quarter were:2
December 2020 | December 2021 | Year on Year Change | |
|---|---|---|---|
Residential mortgages – credit outstanding | $1,878.5 billion | $2,000.5 billion | 6.5% |
of which: Owner-occupied | $1,177.6 billion | $1,294.6 billion | 9.9% |
of which: Investment | $609.6 billion | $624.7 billion | 2.5% |
Residential mortgages – credit outstanding | December 2020 (share of total) | December 2021 (share of total) | Year on Year Change |
|---|---|---|---|
Owner-occupied | 64.2% | 65.9% | +1.7 percentage points |
Investment | 33.2% | 31.8% | -1.4 percentage points |
Interest-only | 14.5% | 11.7% | -2.8 percentage points |
LVR ≥ 90 per cent | 4.9% | 4.1% | -0.7 percentage points |
Non-performing | 1.0% | 0.8% | -0.2 percentage points |
December 2020 quarter | December 2021 quarter | Change | |
|---|---|---|---|
New residential mortgage loans funded | $128.1 billion | $171.0 billion | 33.4% |
New residential mortgage loans funded during the quarter | December 2020 (share of total) | December 2021 (share of total) | Change |
|---|---|---|---|
Owner-occupied | 69.8% | 67.8% | -2.1 percentage points |
Investment | 28.6% | 30.4% | +1.8 percentage points |
Interest-only | 19.4% | 19.3% | -0.1 percentage points |
LVR ≥ 90 per cent | 11.3% | 7.9% | -3.5 percentage points |
Debt-to-income ≥ 6x | 17.3% | 24.4% | +7.1 percentage points |
Key commercial property statistics for ADIs for December 2021 were:
December 2020 | December 2021 | Year on Year Change | |
|---|---|---|---|
Total commercial property limits | $359.1 billion | $392.6 billion | 9.3% |
Total commercial property exposures | $303.1 billion | $328.2 billion | 8.3% |
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.
Copies of the December 2021 publications are available at: .
Footnotes:
1 Excluding ADIs that are not banks, building societies or credit unions.
2 See Explanatory Notes of QPEX for details of share calculations
