While global leaders (we use the term very loosely) gather in the trendy French town of Cannes to ruminate on the myriad problems caused by too much debt, Aussie banks are still reaping the benefits of an increasing Australian debt.
November 3rd, 2011 | Greg Canavan | 6 comments | ContinuedAll Posts Tagged With: "NAB"
RBA Governor Glenn Stevens Reveals Intention to Raise Interest Rates to Normal Levels
When the man who sets interest rates tells you that you’re rising, it would be wise to at least hear him out. Whether you take him at his word is up to you. But if you’re making financial plans – say, like you’re going to buy a house and are trying to figure out if you can stand a few extra points rise in the interest rate – the man has told you what is going to happen.
March 30th, 2010 | Dan Denning | 48 comments | Continued
It All Comes Down to Debt Again for NAB
NAB came by the bonds because it accepted them as collateral for what it described as an “interbank reverse repurchase agreement.” Got that? From what we can gather, NAB may be obligated to take on certain loan obligations of its bank partner “under certain circumstances.”
December 22nd, 2009 | Dan Denning | 2 comments | Continued
Inflation is Evident If You Just Follow the Money
One quick note about this: there is obviously plenty of inflation in the prices you pay every day. But most consumer price indices are rigged to understate inflation, as our colleague David Evans pointed out yesterday in Canberra at the Gold Standard Institute conference in Canberra. Trimmed medians…hedonic adjustments…
November 2nd, 2009 | Dan Denning | 5 comments | Continued
Rally in Stocks and Rise in Aussie Dollar is a Result of the Carry Trade
That’s just what happened last year. Only then, it was both a dollar and yen carry trade that led to a rise in Aussie assets. Once the credit crisis set in, the yen carry got dropped and investors fled risk assets and piled right back into the greenback and U.S. Treasuries.
October 29th, 2009 | Dan Denning | 9 comments | Continued
Banks Could Face Larger Asset Writedowns and Losses than IMF has Modelled
Next time around, though, we reckon the losses – when they come – will be on domestic real estate assets. And with so much exposure to domestic real estate (mortgage loans), the assets could face a world of hurt. But even if bank asset quality doesn’t crash (housing prices don’t crash), an external shock affects Aussie bank liabilities.
October 28th, 2009 | Dan Denning | 2 comments | Continued
Banks or BHP?
Are Australian banks going to be able to sustain their dividends? Over the last ten years, bank fee income has become a big driver of bank profitability (and the source of the dividends paid by banks). The credit crunch has crunched the amount of money banks make lending money.
August 13th, 2009 | Dan Denning | 3 comments | Continued
Purpose of Funds Management Industry IS to Put People into Common Stocks
The bad news is that existing shareholders took a hit on their shares when NAB discounted the offering to the current share price. It probably had to do this to incentivise buyers. But that was the hidden cost, and it was born by existing shareholders. And in any event, we’re still not convinced that capital raised to buffer against further loan losses is the kind of event a shareholder would be bullish about.
July 24th, 2009 | Dan Denning | 20 comments | Continued
A Credit Depression
You don’t need to own subprime loans to take loan losses in a credit depression. Smith said the area that concerned him most was the surge in small and mid-size businesses simply closing up shop unexpectedly. “In the real economy,” he said, “there is no evidence that the world economy is yet bottoming.”
April 30th, 2009 | Dan Denning | 5 comments | Continued
National Australia Bank Hasn’t Hit Bottom Yet
National Australia Bank (ASX: NAB) CEO John Stewart set aside a provision of $820 million for credit risk on Friday July 25, 2008. This indicates there may be more subprime losses to come. Stewart commented, “This is the bottom for us for housing in the U.S. because we are now cleared out.” That’s quite a statement. Especially seeing as Stewart considers the US to be less than half-way through this crisis. Total losses equal US$450 million.
July 28th, 2008 | Dan Denning | 3 comments | Continued
Australian Banks Must Increase Fees or Expand Loans to Remain Profitable
The news that’s all the rage today is Westpac’s (ASX: WBC) $19 billion bid for St. George (ASX: SGB). But in an age of rising interest rates and credit contraction, how will Australian banks remain profitable… Fees. If profitability on loans is declining (and it is), the banks could make it up charging you more fees. The growth rate in bank fees has actually declined, if you peruse the data from the Reserve Bank.
May 13th, 2008 | Dan Denning | 1 comment | Continued
