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 30 June 2024.
ADIs are well-capitalised despite a slight decline in capital ratios over the quarter. Capital levels remain near all-time highs, well above the unquestionably strong benchmarks. Capital levels have been bolstered by the domestic systemically important banks (D-SIBs) increasing tier two capital to meet APRA’s loss-absorbing capacity requirements.
Stagnating income growth caused a slight decline in profitability, with further headwinds over the near term. Despite some signs of easing toward the end of the quarter, competition remained elevated. ADIs completed the final repayments of the Term Funding Facility smoothly, and liquidity levels remained well above regulatory minimums. Overall asset quality remained sound, despite a slight increase in non-performing loans.
New residential mortgage lending continued to grow for both owner-occupiers and investors. It remained well above pre-pandemic levels, despite higher interest rates. Lending standards remained prudent.
Commercial real estate lending growth increased marginally, driven by continued demand for industrial property and a recovery in retail property, although the overall rate of growth remained low. Non-performing commercial real estate exposures were broadly stable at low levels.
Key statistics for ADIs1 for the June 2024 quarter were:
June 2023 | June 2024 | Year on Year Change | |
|---|---|---|---|
| Net profit after tax (year-end) ($bn) | $41.8 | $39.0 | -6.7% |
| Total assets ($bn) | $6,119.2 | $6,225.6 | 1.7% |
| Total capital base ($bn) | $432.4 | $448.7 | 3.8% |
| Total risk-weighted assets ($bn) | $2,198.1 | $2,200.0 | 0.1% |
| Total capital ratio | 19.7% | 20.4% | 0.7% |
| Liquidity coverage ratio | 134.0% | 133.0% | -1.1% |
| Minimum liquidity holdings ratio | 17.2% | 16.9% | -0.3% |
| Net stable funding ratio | 120.3% | 116.2% | -4.2% |
Key statistics for ADIs conducting residential mortgage lending for the quarter were:2
June 2023 | June 2024 | Year on Year Change | |
|---|---|---|---|
| Residential mortgages – credit outstanding ($bn) | $2,170.1 | $2,262.1 | 4.2% |
| of which: Owner-occupied ($bn) | $1,445.0 | $1,514.0 | 4.8% |
| of which: Investment ($bn) | $650.5 | $676.6 | 4.0% |
| Residential mortgages – credit outstanding | June 2023 (share of total) | June 2024 (share of total) | Year on Year Change |
|---|---|---|---|
| Owner-occupied | 67.5% | 67.7% | 0.2% |
| Investment | 30.4% | 30.3% | -0.1% |
| LVR ≥ 80 per cent | 18.3% | 17.6% | -0.6% |
| Loans 30-89 days past due | 0.5% | 0.7% | 0.1% |
| Non-performing loans | 0.8% | 1.0% | 0.3% |
June 2023 quarter | June 2024 quarter | Change | |
|---|---|---|---|
| New residential mortgage loans funded ($bn) | $151.0 | $161.5 | 6.9% |
| New residential mortgage loans funded during the quarter | June 2023 (share of total) | June 2024 (share of total) | Change |
|---|---|---|---|
| Owner-occupied | 66.4% | 63.3% | -3.1% |
| Investment | 31.6% | 34.5% | 2.9% |
| LVR ≥ 80 per cent | 29.5% | 31.9% | 2.4% |
| Debt-to-income ≥ 6x | 6.1% | 5.0% | -1.1% |
Key commercial property statistics for ADIs for the March 2024 quarter were:
June 2023 | June 2024 | Year on Year Change | |
|---|---|---|---|
| Total commercial property limits ($bn) | $439.9 | $455.6 | 3.6% |
| Total commercial property actual exposures ($bn) | $405.5 | $421.9 | 4.0% |
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 2024 publications are available at: .
Footnotes
1Excluding ADIs that are not banks, building societies or credit unions.
2See Explanatory Notes of QPEX for details of share calculations.
