Domestic banks remain in comparatively good shape though they now face a more challenging external environment according to Fitch Ratings.
Tim Roche, associate director at Fitch’s Financial Institutions Group, said slowing loan growth, rising impaired assets and elevated wholesale funding costs would continue to place pressure on Australian banks into 2009.
But despite worsening market conditions he commented that Australian banks “particularly the larger more diversified institutions appear to have withstood the pressures of the ongoing credit crisis relatively well”.
Mr Roche also noted that arrears rates on Australian loan portfolios remained below historical averages and favourable in comparison with those in the US and UK.
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