Monday, July 11, 2011

Deutsche Bank Assesses Australian Bank Future Real Estate Losses

Hedge funds are already shorting Australian Banks. Now the analysts are piling on. But what of these tepid non-responses from the banks? Get your act together, guys.

Of course they let 60% of their loan book end up in residential real estate, so they haven't been paying much attention to anything, it seems.

Australian Homes May Cost Banks $7.5 Billion in a Year, Deustche Bank Says
Australia’s biggest banks may lose about A$7 billion ($7.5 billion) from a 30 percent drop in home prices and a 9 percent default rate, Deutsche Bank AG said.
The banks face losses ranging from A$61 million in the mildest scenario to A$41.7 billion in a year, the report said. The smallest loss would result from a 1 percent default rate and a 10 percent home-price decline, while the worst-case scenario is based on a 15 percent default rate and a 60 percent plunge in housing values, Deutsche Bank said.
Still, Commonwealth Bank, Westpac, National Australia Bank, ANZ Bank and Macquarie Bank Ltd. face a A$223 billion “gap” as they seek to meet Basel’s net stable funding ratio, with National Australia Bank having the biggest shortfall, the Deutsche Bank analysts wrote.

No comments: