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 September 2022.
ADIs’ profitability, asset quality, capital and liquidity positions remained strong over the September 2022 quarter. ADIs’ net profit increased by 8.0 per cent for the year ended September 2022, largely due to improvements in net interest income. The non-performing loan ratio improved in the quarter, with rising interest rates yet to have a material impact on asset quality.
The risk characteristics of ADIs’ new residential mortgage lending are improving. Lending at high debt-to-income (DTI ≥ 6 times) has declined substantially over the past 12 months, from 23.3 per cent of new lending in the September 2021 quarter, to 17.1 per cent in September 2022. New lending at high loan-to-valuation ratios (LVR ≥ 90 per cent) also declined, from 7.5 per cent in September 2021 to 6.2 per cent in September 2022. New residential mortgages funded in the quarter were $151.0 billion, declining by 10.0 per cent compared to the same quarter last year; however, this is still above pre-pandemic levels.
Commercial real estate lending has continued to grow strongly. ADIs’ commercial property limits increased by 9.5 per cent, and actual exposures by 10.0 per cent, compared to the same quarter last year. Non-performing commercial property loans as a share of commercial property actual exposures remained unchanged from the previous June quarter at 0.5 per cent.
Key statistics for ADIs1 for the September 2022 quarter were:
September 2021 | September 2022 | Year on Year Change | |
|---|---|---|---|
Net profit after tax (year-end) | $36.4 billion | $39.3 billion | +8.0% |
Total assets | $5,474.8 billion | $6,190.1 billion | +13.1% |
Total capital base | $395.1 billion | $409.6 billion | +3.7% |
Total risk-weighted assets | $2,133.0 billion | $2,318.8 billion | +8.7% |
Total capital ratio | 18.5% | 17.7% | -0.9 percentage points |
Minimum liquidity holdings ratio | 19.6% | 17.7% | -1.9 percentage points |
Liquidity coverage ratio | 132.9% | 132.9% | Unchanged |
Key statistics for ADIs conducting residential mortgage lending for the quarter were:2
September 2021 | September 2022 | Year on Year Change | |
|---|---|---|---|
Residential mortgages – credit outstanding | $1,962.0 billion | $2,090.7 billion | 6.6% |
of which: Owner-occupied | $1,282.8 billion | $1,379.1 billion | 7.5% |
of which: Investment | $595.3 billion | $633.6 billion | 6.4% |
Residential mortgages – credit outstanding | September 2021 (share of total) | September 2022 (share of total) | Year on Year Change |
|---|---|---|---|
Owner-occupied | 66.7% | 67.0% | +0.3 percentage points |
Investment | 31.0% | 30.8% | -0.2 percentage points |
Interest-only | 12.3% | 11.1% | -1.2 percentage points |
LVR ≥ 90 per cent | 4.3% | 3.4% | -0.9 percentage points |
September 2021 quarter | September 2022 quarter | Change | |
|---|---|---|---|
New residential mortgage loans funded | $167.8 billion | $151.0 billion | -10.0% |
New residential mortgage loans funded during the quarter | September 2021 (share of total) | September 2022 (share of total) | Change |
|---|---|---|---|
Owner-occupied | 68.9% | 68.0% | -1.0 percentage points |
Investment | 29.3% | 29.9% | +0.6 percentage points |
Interest-only | 19.0% | 19.6% | +0.6 percentage points |
LVR ≥ 90 per cent | 7.5% | 6.2% | -1.3 percentage points |
Debt-to-income ≥ 6x | 23.3% | 17.1% | -6.2 percentage points |
Key commercial property statistics for ADIs for the September 2022 quarter were:
September 2021 | September 2022 | Year on Year Change | |
|---|---|---|---|
Total commercial property limits | $381.0 billion | $417.1 billion | 9.5% |
Total commercial property actual exposures | $329.2 billion | $362.0 billion | 10.0% |
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 September 2022 publications are available at .
Footnotes
1Excluding ADIs that are not banks, building societies or credit unions.
2 See Explanatory Notes of QPEX for details of share calculations.
