The Australian Prudential Regulation Authority (APRA) has released the Quarterly Authorised Deposit-taking Institution (ADI) Performance and the Quarterly ADI Property Exposure publications for the quarter ending 30 June 2022.
The ADI industry remained strong in the June 2022 quarter. Industry net profit improved over the year, up $5.7 billion, returning to pre-pandemic levels. A reduction in charges for bad or doubtful debts (down $2.5 billion) also contributed to ADIs’ increased profit, as provisions raised during the earlier stages of the pandemic continue to be released. ADIs’ capital positions remain well above regulatory minimums, having moderated from pandemic highs. Liquidity positions also remain strong as the Reserve Bank normalises monetary conditions.
Credit growth and asset quality is healthy. New residential mortgage lending increased by $3.7 billion in the June 2022 quarter, compared to the same quarter last year. The share of new lending with high debt-to-income ratios is starting to trend down, but remains elevated. Non performing loans as a share of total credit outstanding remained low, declining from 0.81 per cent to 0.78 per cent in the June quarter.
Commercial real estate lending has continued to grow. ADIs’ commercial property limits increased by 12.0 per cent, and actual exposures by 11.6 per cent, compared to the June 2021 quarter. Non-performing commercial property loans as a share of commercial property actual exposures remained steady at 0.5 per cent in the June quarter.
Key statistics for ADIs1 for the June 2022 quarter were:
June 2021 | June 2022 | Year on Year Change | |
Net profit after tax (year-end) | $32.3 billion | $38.1 billion | +17.7% |
Total assets | $5,381.8 billion | $6,002.6 billion | +11.5% |
Total capital base | $387.1 billion | $388.5 billion | +0.4% |
Total risk-weighted assets | $2,105.9 billion | $2,304.2 billion | +9.4% |
Total capital ratio | 18.4% | 16.9% | -1.5 percentage points |
Minimum liquidity holdings ratio | 18.5% | 17.3% | -1.2 percentage points |
Liquidity coverage ratio | 132.4% | 134.7% | +2.3 percentage points |
Key statistics for ADIs conducting residential mortgage lending for the quarter were:2
June 2021 | June 2022 | Year on Year Change | |
Residential mortgages – credit outstanding | $1,934.7 billion | $2,076.1 billion | 7.3% |
of which: Owner-occupied | $1,254.9 billion | $1,364.8 billion | 8.8% |
of which: Investment | $592.1 billion | $630.5 billion | 6.5% |
Residential mortgages – credit outstanding | June 2021 (share of total) | June 2022 (share of total) | Year on Year Change |
Owner-occupied | 66.3% | 66.9% | +0.6 percentage points |
Investment | 31.3% | 30.9% | -0.4 percentage points |
Interest-only | 13.0% | 11.1% | -1.9 percentage points |
LVR ≥ 90 per cent | 4.6% | 3.6% | -1.0 percentage points |
June 2021 quarter | June 2022 quarter | Change | |
New residential mortgage loans funded | $155.9 billion | $159.6 billion | 2.4% |
New residential mortgage loans funded during the quarter | June 2021 (share of total) | June 2022 (share of total) | Change |
Owner-occupied | 70.6% | 67.1% | -3.5 percentage points |
Investment | 27.8% | 30.9% | +3.1 percentage points |
Interest-only | 18.4% | 20.0% | +1.6 percentage points |
LVR ≥ 90 per cent | 8.6% | 6.4% | -2.2 percentage points |
Debt-to-income ≥ 6x | 21.9% | 22.1% | +0.3 percentage points |
Key commercial property statistics for ADIs for the June 2022 quarter were:
June 2021 | June 2022 | Year on Year Change | |
Total commercial property limits | $369.5 billion | $413.7 billion | 12.0% |
Total commercial property actual exposures | $320.3 billion | $357.4 billion | 11.6% |
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 June 2022 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
