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 September 2021.
Measures of ADI industry resilience remained strong in the September 2021 quarter despite lockdowns across the country. Industry profitability improved over the past year, partly due to ADIs releasing provisions raised during the earlier stages of the pandemic. ADIs held strong capital and liquidity positions and non-performing loans remained broadly stable.
In residential mortgage lending, the share of new lending with high debt-to-income ratios continued to increase over the quarter, influenced by the low interest rate environment, increasing house prices and relatively low wage growth. APRA announced a 50 basis point increase to the minimum interest rate buffer used in ADI serviceability assessments, from 1 November 2021, which would not be reflected in this September data.
Key statistics for ADIs1 for the September 2021 quarter were:
September 2020 | September 2021 | Year on Year Change | |
|---|---|---|---|
Net profit after tax (year-end) | $21.0 billion | $36.4 billion | +73.2% |
Total assets | $5,243.0 billion | $5,474.8 billion | +4.4% |
Total capital base | $355.1 billion | $395.1 billion | +11.3% |
Total risk-weighted assets | $2,106.8 billion | $2,133.0 billion | +1.2% |
Total capital ratio | 16.9% | 18.5% | +1.7 percentage points |
Minimum liquidity holdings ratio | 19.7% | 19.6% | -0.1 percentage points |
Liquidity coverage ratio | 144.5% | 133.1% | -11.4 percentage points |
Impaired assets and past due items | $37.7 billion | $35.2 billion | -6.8% |
Key statistics for ADIs conducting residential mortgage lending for the quarter were2:
September 2020 | September 2021 | Year on Year Change | |
|---|---|---|---|
Residential mortgages – credit outstanding | $1,856.1 billion | $1,962.1 billion | 5.7% |
of which: Owner-occupied | $1,153.1 billion | $1,263.8 billion | 9.6% |
of which: Investment | $608.4 billion | $614.2 billion | 1.0% |
Residential mortgages – credit outstanding | September 2020 (share of total) | September 2021 (share of total) | Year on Year Change |
|---|---|---|---|
Owner-occupied | 63.7% | 65.7% | +2.0 percentage points |
Investment | 33.6% | 31.9% | -1.7 percentage points |
Interest-only | 15.2% | 12.3% | -3.0 percentage points |
LVR ≥ 90 per cent | 4.8% | 4.3% | -0.5 percentage points |
Non-performing | 1.1% | 0.9% | -0.1 percentage points |
September 2020 | September 2021 | Change | |
New residential mortgage loans funded during the quarter | $113.3 billion | $167.8 billion | 48.2% |
New residential mortgage loans funded during the quarter | September 2020 (share of total) | September 2021 (share of total) | Change |
|---|---|---|---|
Owner-occupied | 69.5% | 68.9% | -0.6 percentage points |
Investment | 28.8% | 29.3% | +0.5 percentage points |
Interest-only | 18.7% | 19.0% | +0.3 percentage points |
LVR ≥ 90 per cent | 10.4% | 7.5% | -2.9 percentage points |
Debt-to-income ≥ 6x | 16.3% | 23.8% | +7.5 percentage points |
Key commercial property statistics for ADIs for September 2021 were:
September 2020 | September 2021 | Year on Year Change | |
Total commercial property limits | $356.6 billion | $381.2 billion | 6.9% |
Total commercial property exposures | $302.6 billion | $320.4 billion | 5.9% |
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 2021 publications are available at: Quarterly authorised deposit-taking institution statistics.
Footnotes
1 Excluding ADIs that are not banks, building societies or credit unions.
2 See Explanatory Notes of QPEX for details of share calculations.
