Statistics. Quarterly Authorised Deposit-taking Institution Property Exposures. March 2014 (released 27 May 2014)

Transcription

1 Statistics Quarterly Authorised Deposit-taking Institution Property Exposures March 2014 (released 27 May 2014) Australian Prudential Regulation Authority

2 Copyright Australian Prudential Regulation Authority (APRA) This work is licensed under the Creative Commons Attribution 3.0 Australia Licence (CCBY 3.0). This licence allows you to copy, distribute and adapt this work, provided you attribute the work and do not suggest that APRA endorses you or your work. To view a full copy of the terms of this licence, visit: Disclaimer While APRA endeavours to ensure the quality of this publication, APRA does not accept any responsibility for the accuracy, completeness or currency of the material included in this Publication, and will not be liable for any loss or damage arising out of any use of, or reliance on, this Publication. Revisions Future editions of this publication may incorporate revisions to data submitted by entities after publication. APRA regularly analyses past revisions to identify potential improvements to the source data and statistical compilation techniques, in order to minimise the frequency and scale of any future revisions. Forthcoming issues This publication will be released according to the timetable published on the APRA website. Notation Amounts are expressed in Australian dollars. Both the Australian-dollar denominated transactions and the Australian-dollar equivalent of foreign-currency denominated transactions are included. The symbol '*' indicates that the data have been masked to maintain confidentiality. Glossary and explanatory notes A set of explanatory notes is provided at the end of the publication to assist the reader in understanding the source and definitions of the data. In particular, these notes help explain differences between the data presented and information publicly released by banks in their financial statements and profit announcements. Enquiries For more information about the statistics in this publication: or write to statistics@apra.gov.au Manager, Banking Statistics Australian Prudential Regulation Authority GPO Box 9836 Sydney NSW 2001 Australian Prudential Regulation Authority 2

3 Contents Important notice Important notice 4 Highlights Highlights 5 All ADIs ADIs Commercial property exposures Table 1a 7 Residential property exposures Table 1b 8 New housing loan approvals Table 1c 9 Banks Commercial property exposures Table 2a 10 Residential property exposures Table 2b 11 New housing loan approvals Table 2c 12 Building Societies Commercial property exposures Table 3a 13 Residential property exposures Table 3b 14 New housing loan approvals Table 3c 15 Credit Unions Commercial property exposures Table 4a 16 Residential property exposures Table 4b 17 New housing loan approvals Table 4c 18 Banks Major banks Commercial property exposures Table 5a 19 Residential property exposures Table 5b 20 New housing loan approvals Table 5c 21 Other domestic banks Commercial property exposures Table 6a 22 Residential property exposures Table 6b 23 New housing loan approvals Table 6c 24 Foreign subsidiary banks Commercial property exposures Table 7a 25 Residential property exposures Table 7b 26 New housing loan approvals Table 7c 27 Foreign branch banks Commercial property exposures Table 8 28 Explanatory notes Explanatory notes 29 Glossary Glossary 31 Australian Prudential Regulation Authority 3

4 Important notice This publication is currently available in two versions: an Adobe PDF version for printing, containing data for the most recent periods; and a Microsoft Excel version, containing a complete time series since 2004 of data. Revisions This edition of the Quarterly ADI Property Exposures publication includes revisions to previously published statistics, due to better source data becoming available. Two institutions resubmitted data, which changed the statistics by at least 10 per cent and $100 million. Bank of America, National Association Bank of America, National Association resubmitted data for the March 2013 and September 2013 quarters. As a result, the following statistics were revised by at least 10 per cent and $100 million: Commercial property exposures of which land development/ subdivision (foreign branch banks) revised for the quarters March 2013 and September 2013 quarters, with September 2013 revised from $678m to $575m. Bendigo and Adelaide Bank Limited Bendigo and Adelaide Bank Limited resubmitted data for the September 2013 and December 2013 quarters. As a result, the following statistics were revised by at least 10 per cent and $100 million: New residential term loan approvals of which interest only loans approved (other domestic banks) revised for the quarters September 2013 and December 2013, with December 2013 revised from $4,053m to $4,550m. Australian Prudential Regulation Authority 4

5 Highlights Commercial property exposures As at 31 March 2014, ADIs* held commercial property exposures of $224.8 billion. This is an increase of $5.0 billion (2.3 per cent) on 31 December 2013 and $14.3 billion (6.8 per cent) on 31 March Commercial property exposures within Australia were $183.8 billion as at 31 March 2014, 81.8 per cent of all commercial property exposures. As shown in figure A: major banks held $195.6 billion of commercial property exposures, an increase of $4.1 billion (2.2 per cent) on 31 December 2013 and $14.3 billion (7.9 per cent) on 31 March 2013; other domestic banks held $12.5 billion, an increase of $132 million (1.1 per cent) on 31 December 2013 and a decrease of $1.7 billion (11.8 per cent) on 31 March 2013; foreign subsidiary banks held $5.0 billion, a decrease of $166 million (3.2 per cent) on 31 December 2013 and $582 million (10.4 per cent) on 31 March 2013; foreign branch banks held $11.1 billion, an increase of $888 million (8.7 per cent) on 31 December 2013 and $2.4 billion (26.9 per cent) on 31 March 2013; building societies held $235 million as at 31 March 2014, an increase of $6 million (2.7 per cent) on 31 March 2013; and credit unions held $347 million as at 31 March 2014, a decrease of $135 million (28.0 per cent) on 31 March Figure A: Total consolidated commercial property exposures by ADI segment The largest property exposures were office property ($66.0 billion) and retail property ($48.9 billion). These represented 29.4 per cent and 21.8 per cent of all exposures respectively. Impaired commercial property exposures were $4.6 billion at 31 March 2014 and specific provisions and security held for commercial property were $4.5 billion. Residential property exposures As at 31 March 2014, the total of residential term loans to households held by all ADIs* was $1.20 trillion. This is an increase of $22.3 billion (1.9 per cent) on 31 December 2013 and an increase of $90.4 billion (8.2 per cent) on 31 March Owner-occupied loans accounted for 66.5 per cent of residential term loans to households. Owneroccupied loans were $795.2 billion, an increase of $13.1 billion (1.7 per cent) on 31 December 2013 and $53.7 billion (7.2 per cent) on 31 March * Excludes 'other ADIs.' See glossary. Australian Prudential Regulation Authority 5

6 Investment loans accounted for 33.5 per cent of residential term loans. Investment loans were $400.3 billion, an increase of $9.2 billion (2.4 per cent) on 31 December 2013 and $36.7 billion (10.1 per cent) on 31 March As shown in figure B: major banks held $971.5 billion of residential term loans, an increase of $17.9 billion (1.9 per cent) on 31 December 2013 and $72.3 billion (8.0 per cent) on 31 March 2013; other domestic banks held $125.2 billion, an increase of $3.2 billion (2.6 per cent) on 31 December 2013 and $17.8 billion (16.5 per cent) on 31 March 2013; foreign subsidiary banks held $53.5 billion, an increase of $475 million (0.9 per cent) on 31 December 2013 and $2.1 billion (4.0 per cent) on 31 March 2013; building societies held $16.9 billion, an increase of $184 million (1.1 per cent) on 31 December 2013 and $810 million (5.0 per cent) on 31 March 2013; and credit unions held $28.4 billion, an increase of $530 million (1.9 per cent) on 31 December 2013 and a decrease of $2.5 billion (8.2 per cent) on 31 March The higher growth of other domestic banks and lower growth of building societies and credit unions in the period shown in Figure B is in part due to the conversion of eight credit unions and one building society to banks. Figure B: Balance of domestic residential term loans to households by ADI segment ADIs with greater than $1 billion of residential term loans held 98.3 per cent of all residential term loans as at 31 March These ADIs reported 5.0 million loans totalling $1.17 trillion. Of these loans: the average loan size was approximately $235,000, compared to $230,000 as at 31 March 2013; $415.4 billion (35.4 per cent) were interest-only loans; and $36.8 billion (3.1 per cent) were low-documentation loans. New housing loan approvals ADIs with greater than $1 billion of residential term loans approved $73.8 billion of new loans in the quarter ending 31 March This is a decrease of $10.3 billion (12.3 per cent) on the quarter ending 31 December 2013 and an increase of $12.2 billion (19.8 per cent) on the quarter ending 31 March Of the new loan approvals: $47.5 billion (64.3 per cent) were for owner-occupied loans, a decrease of $6.7 billion (12.3 per cent) from the quarter ending 31 December 2013; $26.3 billion (35.7 per cent) were for investment loans, a decrease of $3.7 billion (12.3 per cent) from the quarter ending 31 December 2013; $29.1 billion (39.4 per cent) were interest-only loans; $9.9 billion (13.5 per cent) had a loan-to-valuation ratio greater than or equal to 90 per cent; and $440 million (0.6 per cent) were low-documentation loans. Australian Prudential Regulation Authority 6

7 Commercial property exposures Table 1a All ADIs' commercial property exposures (Excludes 'other ADIs') ($ million, consolidated group) Office 60,568 61,933 64,068 64,884 66,027 Retail 45,116 45,475 46,176 47,270 48,950 Industrial 24,862 24,753 25,363 26,371 26,725 Land development/subdivisions 15,563 16,016 15,567 14,894 14,790 Other residential 27,112 26,239 26,133 26,512 27,936 Tourism and leisure 8,579 8,819 8,944 8,639 8,651 Other 28,682 30,362 30,792 31,219 31,718 Total commercial property exposures 210, , , , ,798 of which: Exposures in Australia 174, , , , ,814 Impaired Commercial property exposures 7,848 6,488 5,743 4,922 4,558 of which: Exposures in Australia 5,639 4,245 3,448 2,691 2,430 Specific provisions 2,314 2,134 1,970 1,828 1,641 of which: Exposures in Australia 1,614 1,375 1, Specific provisions and security 7,630 6,319 5,551 5,008 4,509 of which: Exposures in Australia 5,345 3,954 3,213 2,659 2,373 Impaired assets to exposures 3.7% 3.0% 2.6% 2.2% 2.0% Specific provisions to exposures 1.1% 1.0% 0.9% 0.8% 0.7% Specific provisions to impaired exposures 29.5% 32.9% 34.3% 37.1% 36.0% Specific provisions and security held to impaired exposures 97.2% 97.4% 96.6% 101.7% 98.9% Number of entities* * Domestic subsidiary banks are consolidated into their parents Australian Prudential Regulation Authority 7

8 All ADIs Residential term loans to households Table 1b ADIs' residential property exposures (Excludes 'other ADIs') (domestic or licensed books*) ($ millions) Owner-occupied 741, , , , ,241 Investment 363, , , , ,302 Total residential term loans 1,105,110 1,128,014 1,146,978 1,173,255 1,195,543 Number of entities ADIs with greater than $1 bn of term loans Residential term loans to households Owner-occupied 724, , , , ,721 Investment 359, , , , ,026 Total residential term loans to households 1,084,171 1,106,809 1,125,819 1,151,806 1,174,747 * Loans with offset facilities 370, , , , ,157 Interest-only mortgages 368, , , , ,374 Reverse mortgages 2,495 2,607 2,622 2,637 2,648 Low-documentation loans 46,436 43,706 41,075 38,714 36,800 Other non-standard loans 1,777 1,616 1,503 1,389 1,314 Number of residential term loans to households 4,721 4,815 4,859 4,932 5,000 * Loans with offset facilities 1,318 1,353 1,380 1,424 1,479 Loans with redraw facilities 3,681 3,742 3,807 3,852 3,899 Interest-only mortgages 1,252 1,291 1,324 1,365 1,398 Reverse mortgages Low-documentation loans Other non-standard loans Average balance of residential term loans to households * ($ millions) (thousands of loans) ($ thousands) Loans with offset facilities Interest-only mortgages Reverse mortgages Low-documentation loans Other non-standard loans Number of entities * Domestic books for banks, licensed books for credit unions and building societies ** Loan categories are neither exhaustive nor mutually exclusive Australian Prudential Regulation Authority 8

9 ADIs with greater than $1 bn of term loans New residential term loans to households approved Owner-occupied 40,990 51,163 50,067 54,128 47,472 Investment 20,637 27,849 26,279 30,032 26,343 Total new residential term loans to households approved 61,627 79,012 76,345 84,160 73,815 * Low-documentation loans approved Interest-only loans approved 21,813 30,535 28,797 33,159 29,091 Other non-standard loans approved Third-party originated loans approved 23,380 30,814 31,155 35,143 30,244 Loans approved outside serviceability 1,897 2,477 2,285 2,625 2,290 New residential term loan approvals by loan-tovaluation ratio (LVR) of which: Table 1c ADIs' new housing loan approvals (Excludes 'other ADIs') ($ million, domestic or licensed books*) Loans approved LVR<60% 16,163 22,690 19,335 20,922 17,763 Loans approved LVR 60%-80% 24,243 30,408 30,565 34,452 30,395 Loans approved LVR 80%-90% 12,151 15,232 15,696 17,382 15,717 Loans approved LVR>90% 9,070 10,682 10,750 11,404 9,940 Number of entities * Domestic books for banks, licensed books for credit unions and building societies ** Loan categories are neither exhaustive nor mutually exclusive Australian Prudential Regulation Authority 9

10 Table 2a Banks' commercial property exposures ($ million, consolidated group) Commercial property exposures Office 60,491 61,857 64,004 64,820 65,945 Retail 44,971 45,330 46,043 47,137 48,821 Industrial 24,712 24,604 25,254 26,261 26,624 Land development/subdivisions 15,487 15,941 15,511 14,838 14,725 Other residential 26,999 26,126 26,030 26,409 27,830 Tourism and leisure 8,554 8,795 8,921 8,616 8,630 Other 28,556 30,236 30,707 31,134 31,640 Total commercial property exposures 209, , , , ,215 of which: Exposures in Australia 173, , , , ,232 Impaired Commercial property exposures 7,842 6,483 5,740 4,918 4,553 of which: Exposures in Australia 5,633 4,239 3,444 2,687 2,426 Specific provisions 2,311 2,131 1,967 1,826 1,639 of which: Exposures in Australia 1,611 1,372 1, Specific provisions and security 7,623 6,312 5,546 5,003 4,504 of which: Exposures in Australia 5,338 3,947 3,209 2,654 2,368 Impaired assets to exposures 3.7% 3.0% 2.7% 2.2% 2.0% Specific provisions to exposures 1.1% 1.0% 0.9% 0.8% 0.7% Specific provisions to impaired exposures 29.5% 32.9% 34.3% 37.1% 36.0% Specific provisions and security held to impaired exposures 97.2% 97.4% 96.6% 101.7% 98.9% Number of entities Australian Prudential Regulation Authority 10

11 Table 2b Banks' residential property exposures (domestic books) All banks ($ millions) Residential term loans to households Owner-occupied 703, , , , ,837 Investment 354, , , , ,416 Total residential term loans 1,058,104 1,081,567 1,102,952 1,128,678 1,150,253 Number of entities Banks with greater than $1 bn of term loans Residential term loans to households Owner-occupied 700, , , , ,676 Investment 353, , , , ,320 Total residential term loans to households 1,054,121 1,076,596 1,097,920 1,123,539 1,145,996 Loans with offset facilities 359, , , , ,202 Interest-only mortgages 363, , , , ,737 Reverse mortgages 2,495 2,607 2,622 2,637 2,648 Low-documentation loans 46,365 43,638 41,012 38,654 36,746 Other non-standard loans 1,775 1,614 1,502 1,387 1,313 Number of residential term loans to households 4,541 4,637 4,696 4,770 4,847 Loans with offset facilities 1,268 1,303 1,331 1,376 1,430 Loans with redraw facilities 3,537 3,601 3,675 3,731 3,778 Interest-only mortgages 1,199 1,238 1,274 1,313 1,346 Reverse mortgages Low-documentation loans Other non-standard loans Average balance of residential term loans to households ($ millions) (thousands of loans) ($ thousands) Loans with offset facilities Interest-only mortgages Reverse mortgages Low-documentation loans Other non-standard loans Number of entities * Loan categories are neither exhaustive nor mutually exclusive Australian Prudential Regulation Authority 11

12 Banks with greater than $1 bn of term loans New residential term loans to households approved Owner-occupied 39,455 49,452 48,579 52,437 45,955 Investment 20,242 27,370 25,857 29,534 25,930 Total new residential term loans to households approved 59,697 76,823 74,435 81,971 71,885 Low-documentation loans approved Interest-only loans approved 21,468 30,082 28,395 32,626 28,627 Other non-standard loans approved Third-party originated loans approved 23,076 30,459 30,811 34,712 29,872 Loans approved outside serviceability 1,840 2,417 2,216 2,541 2,227 New residential term loan approvals by loan-tovaluation ratio (LVR) of which: Table 2c Banks' new housing loan approvals ($ million, domestic books) Loans approved LVR<60% 15,598 22,101 18,740 20,221 17,217 Loans approved LVR 60%-80% 23,503 29,579 29,822 33,664 29,655 Loans approved LVR 80%-90% 11,858 14,890 15,454 17,050 15,400 Loans approved LVR>90% 8,738 10,254 10,420 11,036 9,612 Number of entities * Loan categories are neither exhaustive nor mutually exclusive Australian Prudential Regulation Authority 12

13 Table 3a Building societies' commercial property exposures ($ million, consolidated group) Half year end Mar 2012 Sep 2012 Mar 2013 Sep 2013 Mar 2014 Commercial property exposures Office Retail Industrial Land development/subdivisions Other residential Tourism and leisure Other Total commercial property exposures of which: Exposures in Australia Impaired Commercial property exposures of which: Exposures in Australia Specific provisions of which: Exposures in Australia Specific provisions and security of which: Exposures in Australia Impaired assets to exposures 0.3% 0.1% 0.8% 0.4% 0.0% Specific provisions to exposures 0.3% 0.0% 0.2% 0.2% 0.0% Specific provisions to impaired exposures 100.0% 60.0% 24.0% 40.0% Specific provisions and security held to impaired exposures 127.8% 160.0% 124.0% 140.0% Number of entities Australian Prudential Regulation Authority 13

14 Table 3b Building societies' residential property exposures (licensed books) All building societies ($ millions) Residential term loans to households Owner-occupied 12,658 12,771 12,975 13,208 13,353 Investment 3,423 3,421 3,442 3,500 3,538 Total residential term loans 16,081 16,192 16,417 16,708 16,891 Number of entities Building Societies with greater than $1 bn of term loans Residential term loans to households Owner-occupied 10,855 10,960 11,162 11,364 11,473 Investment 2,758 2,745 2,777 2,809 2,842 Total residential term loans to households 13,613 13,705 13,939 14,173 14,314 Loans with offset facilities 3,261 3,360 3,486 3,604 3,726 Interest-only mortgages 2,009 2,056 2,178 2,272 2,335 Reverse mortgages Low-documentation loans Other non-standard loans * * * * * Number of residential term loans to households Loans with offset facilities Loans with redraw facilities Interest-only mortgages Reverse mortgages Low-documentation loans Other non-standard loans * * * * * Average balance of residential term loans to households Loans with offset facilities Interest-only mortgages Reverse mortgages ($ millions) (thousands of loans) ($ thousands) Low-documentation loans Other non-standard loans Number of entities * Loan categories are neither exhaustive nor mutually exclusive Australian Prudential Regulation Authority 14

15 Table 3c Building societies' new housing loan approvals ($ million, licensed books) Building societies with greater than $1 bn of term loans New residential term loans to households approved Owner-occupied Investment Total new residential term loans to households approved Low-documentation loans approved Interest-only loans approved Other non-standard loans approved Third-party originated loans approved Loans approved outside serviceability New residential term loan approvals by loan-tovaluation ratio (LVR) of which: Loans approved LVR<60% Loans approved LVR 60%-80% Loans approved LVR 80%-90% Loans approved LVR>90% Number of entities * Loan categories are neither exhaustive nor mutually exclusive Australian Prudential Regulation Authority 15

16 Table 4a Credit unions' commercial property exposures ($ million, consolidated group) Half year end Mar 2012 Sep 2012 Mar 2013 Sep 2013 Mar 2014 Commercial property exposures Office Retail Industrial Land development/subdivisions Other residential Tourism and leisure Other Total commercial property exposures of which: Exposures in Australia Impaired Commercial property exposures of which: Exposures in Australia Specific provisions of which: Exposures in Australia Specific provisions and security of which: Exposures in Australia Impaired assets to exposures 6.5% 5.6% 0.7% 0.8% 1.3% Specific provisions to exposures 2.0% 2.2% 0.6% 0.7% 0.7% Specific provisions to impaired exposures 31.3% 40.0% 75.6% 80.9% 53.7% Specific provisions and security held to impaired exposures 122.0% 111.4% 125.8% 109.5% 106.3% Number of entities Australian Prudential Regulation Authority 16

17 Table 4b Credit unions' residential property exposures (licensed books) All credit unions ($ millions) Residential term loans to households Owner-occupied 25,221 24,620 22,474 22,619 23,051 Investment 5,703 5,635 5,134 5,249 5,347 Total residential term loans 30,924 30,255 27,608 27,868 28,398 Number of entities Credit unions with greater than $1 bn of term loans Residential term loans to households Owner-occupied 13,233 13,265 11,225 11,297 11,572 Investment 3,204 3,243 2,735 2,796 2,865 Total residential term loans to households 16,437 16,508 13,960 14,093 14,437 Loans with offset facilities 7,449 7,458 7,207 7,137 7,229 Interest-only mortgages 2,647 2,635 2,159 2,219 2,302 Reverse mortgages Low-documentation loans Other non-standard loans * * * * * Number of residential term loans to households Loans with offset facilities Loans with redraw facilities Interest-only mortgages Reverse mortgages Low-documentation loans Other non-standard loans * * * * * Average balance of residential term loans to households Loans with offset facilities Interest-only mortgages Reverse mortgages Low-documentation loans Other non-standard loans ($ millions) (thousands of loans) ($ thousands) Number of entities * Loan categories are neither exhaustive nor mutually exclusive Australian Prudential Regulation Authority 17

18 Table 4c Credit unions' new housing loan approvals ($ million, licensed books) Credit unions with greater than $1 bn of term loans New residential term loans to households approved Owner-occupied 928 1, Investment Total new residential term loans to households approved 1,167 1,276 1,074 1,286 1,135 Low-documentation loans approved Interest-only loans approved Other non-standard loans approved Third-party originated loans approved Loans approved outside serviceability New residential term loan approvals by loan-tovaluation ratio (LVR) of which: Loans approved LVR<60% Loans approved LVR 60%-80% Loans approved LVR 80%-90% Loans approved LVR>90% Number of entities * Loan categories are neither exhaustive nor mutually exclusive Australian Prudential Regulation Authority 18

19 Table 5a Major banks' commercial property exposures ($ million, consolidated group) Commercial property exposures Office 53,220 55,130 56,510 57,333 58,067 Retail 38,590 39,356 39,700 40,830 42,135 Industrial 21,591 21,929 22,382 23,339 23,818 Land development/subdivisions 13,120 13,513 13,012 12,621 12,519 Other residential 21,219 20,762 20,860 21,226 22,489 Tourism and leisure 6,983 7,282 7,352 7,175 7,032 Other 26,558 28,558 28,775 28,953 29,563 Total commercial property exposures 181, , , , ,623 of which: Exposures in Australia 146, , , , ,072 Impaired Commercial property exposures 5,684 5,367 4,774 4,325 4,024 of which: Exposures in Australia 3,492 3,141 2,495 2,112 1,912 Specific provisions 1,767 1,736 1,613 1,573 1,427 of which: Exposures in Australia 1, Specific provisions and security 5,409 5,212 4,614 4,376 3,955 of which: Exposures in Australia 3,141 2,864 2,293 2,045 1,835 Impaired assets to exposures 3.1% 2.9% 2.5% 2.3% 2.1% Specific provisions to exposures 1.0% 0.9% 0.9% 0.8% 0.7% Specific provisions to impaired exposures 31.1% 32.3% 33.8% 36.4% 35.5% Specific provisions and security held to impaired exposures 95.2% 97.1% 96.6% 101.2% 98.3% Number of entities* * Domestic subsidiary banks are consolidated into their parents Australian Prudential Regulation Authority 19

20 Table 5b Major banks' residential property exposures (domestic books) All major banks ($ millions) Residential term loans to households Owner-occupied 596, , , , ,530 Investment 302, , , , ,980 Total residential term loans 899, , , , ,509 Number of entities* Major banks with greater than $1 bn of term loans Residential term loans to households Owner-occupied 596, , , , ,530 Investment 302, , , , ,980 Total residential property exposures 899, , , , ,509 * Loans with offset facilities 321, , , , ,779 Interest-only mortgages 317, , , , ,192 Reverse mortgages 2,099 2,136 2,161 2,184 2,201 Low-documentation loans 42,069 39,549 37,228 35,094 33,325 Other non-standard loans 1,587 1,424 1,307 1,192 1,095 Number of residential term loans to households * 3,832 3,915 3,953 4,007 4,064 Loans with offset facilities 1,120 1,147 1,172 1,209 1,255 Loans with redraw facilities 2,972 3,026 3,063 3,108 3,146 Interest-only mortgages 1,039 1,076 1,105 1,137 1,164 Reverse mortgages Low-documentation loans Other non-standard loans Average balance of residential term loans to households * ($ millions) (thousands of loans) ($ thousands) Loans with offset facilities Interest-only mortgages Reverse mortgages Low-documentation loans Other non-standard loans Number of entities* * Includes domestic subsidiary banks ** Loan categories are neither exhaustive nor mutually exclusive Australian Prudential Regulation Authority 20

21 Table 5c Major banks' new housing loan approvals ($ million, domestic books) Major banks with greater than $1 bn of term loans New residential term loans to households approved Owner-occupied 32,281 40,714 39,004 42,180 36,998 Investment 16,144 22,209 20,433 23,728 20,799 Total new residential term loans to households approved 48,425 62,923 59,438 65,908 57,798 Low-documentation loans approved Interest-only loans approved 18,112 25,548 23,178 26,619 23,367 Other non-standard loans approved Third-party originated loans approved 17,864 23,605 23,006 25,847 22,437 Loans approved outside serviceability 1,531 2,072 1,935 2,184 1,911 New residential term loan approvals by loan-to-valuation ratio (LVR) of which: Loans approved LVR<60% 12,451 18,527 14,982 16,390 14,223 Loans approved LVR 60%-80% 19,238 23,804 23,641 26,807 23,389 Loans approved LVR 80%-90% 9,893 12,363 12,575 14,101 12,562 Loans approved LVR>90% 6,843 8,229 8,240 8,610 7,623 Number of entities** * Loan categories are neither exhaustive nor mutually exclusive ** Includes domestic subsidiary banks Australian Prudential Regulation Authority 21

22 Table 6a Other domestic banks' commercial property exposures ($ million, consolidated group) Commercial property exposures Office 3,818 3,316 3,569 3,688 3,768 Retail 2,635 1,955 1,934 1,975 1,886 Industrial 1,507 1,339 1,448 1,471 1,469 Land development/subdivisions Other residential 3,465 3,049 2,933 3,028 2,987 Tourism and leisure 1,062 1,020 1, Other Total commercial property exposures 14,172 11,951 12,312 12,370 12,502 of which: Exposures in Australia 13,430 * * * * Impaired Commercial property exposures 1, of which: Exposures in Australia 1,746 * * * * Specific provisions of which: Exposures in Australia 414 * * * * Specific provisions and security 1, of which: Exposures in Australia 1,833 * * * * Impaired assets to exposures 12.4% 5.2% 4.2% 3.3% 2.7% Specific provisions to exposures 3.0% 2.2% 1.9% 1.6% 1.1% Specific provisions to impaired exposures 23.9% 42.1% 44.4% 48.1% 39.8% Specific provisions and security held to impaired exposures 105.0% 104.2% 103.1% 105.1% 104.2% Number of entities* * Domestic subsidiary banks are consolidated into their parents Australian Prudential Regulation Authority 22

23 Table 6b Other domestic banks' residential property exposures (domestic books) All other domestic banks ($ millions) Residential term loans to households Owner-occupied 71,834 74,620 78,751 81,389 83,165 Investment 35,631 37,404 38,950 40,691 42,069 Total residential term loans 107, , , , ,234 Number of entities* Other domestic banks with greater than $1 bn of term loans Residential term loans to households Owner-occupied 69,636 71,585 75,681 78,264 80,748 Investment 35,247 36,852 38,397 40,122 41,697 Total residential property exposures 104, , , , ,445 * Loans with offset facilities 28,594 29,306 30,521 32,020 33,661 Interest-only mortgages 30,907 31,790 32,937 34,830 36,554 Reverse mortgages Low-documentation loans 3,494 3,398 3,160 2,991 2,903 Other non-standard loans Number of residential term loans to households * Loans with offset facilities Loans with redraw facilities Interest-only mortgages Reverse mortgages Low-documentation loans Other non-standard loans Average balance of residential term loans to households * ($ millions) (thousands of loans) ($ thousands) Loans with offset facilities Interest-only mortgages Reverse mortgages Low-documentation loans Other non-standard loans Number of entities* * Includes domestic subsidiary banks ** Loan categories are neither exhaustive nor mutually exclusive Australian Prudential Regulation Authority 23

24 Table 6c Other domestic banks' new housing loan approvals ($ million, domestic books) Other domestic banks with greater than $1 bn of term loans New residential term loans to households approved Owner-occupied 5,434 6,349 6,739 7,625 6,850 Investment 2,963 3,602 3,605 4,301 3,900 Total new residential term loans to households approved 8,397 9,952 10,345 11,926 10,750 * Low-documentation loans approved Interest-only loans approved 2,537 3,171 3,726 4,550 4,198 Other non-standard loans approved Third-party originated loans approved 3,460 4,541 4,858 6,047 5,257 Loans approved outside serviceability New residential term loan approvals by loan-to-valuation ratio (LVR) of which: Loans approved LVR<60% 2,537 2,453 2,458 2,785 2,509 Loans approved LVR 60%-80% 3,096 4,216 4,297 5,067 4,742 Loans approved LVR 80%-90% 1,261 1,641 1,850 2,108 1,869 Loans approved LVR>90% 1,504 1,641 1,739 1,967 1,631 Number of entities** * Loan categories are neither exhaustive nor mutually exclusive **Includes domestic subsidiary banks Australian Prudential Regulation Authority 24

25 Table 7a Foreign subsidiary banks' commercial property exposures ($ million, consolidated group) Commercial property exposures Office 2,006 1,919 1,975 1,826 1,800 Retail Industrial Land development/subdivisions Other residential 1, Tourism and leisure Other Total commercial property exposures 5,585 5,420 5,620 5,168 5,002 of which: Exposures in Australia 5,545 * * * * Impaired Commercial property exposures of which: Exposures in Australia 367 * * * * Specific provisions of which: Exposures in Australia 103 * * * * Specific provisions and security of which: Exposures in Australia 344 * * * * Impaired assets to exposures 6.6% 8.5% 7.3% 3.2% 3.3% Specific provisions to exposures 1.8% 1.9% 1.7% 0.9% 1.1% Specific provisions to impaired exposures 27.9% 22.9% 23.3% 26.5% 34.4% Specific provisions and security held to impaired exposures 93.8% 92.0% 89.2% 111.2% 102.9% Number of entities Australian Prudential Regulation Authority 25

26 Table 7b Foreign subsidiary banks' residential property exposures (domestic books) All foreign subsidiary banks ($ millions) Residential term loans to households Owner-occupied 35,278 34,611 35,231 35,863 36,127 Investment 16,148 16,098 16,642 17,145 17,356 Total residential term loans 51,426 50,709 51,873 53,008 53,482 Number of entities Foreign subsidiary banks with greater than $1 bn of term loans Residential term loans to households Owner-occupied 34,548 33,887 34,498 35,129 35,398 Investment 15,498 15,457 15,991 16,456 16,644 Total residential term loans to households 50,046 49,345 50,489 51,585 52,041 Loans with offset facilities 9,209 9,433 9,880 10,330 10,762 Interest-only mortgages 15,529 15,375 15,996 16,577 16,991 Reverse mortgages Low-documentation loans Other non-standard loans Number of residential term loans to households Loans with offset facilities Loans with redraw facilities Interest-only mortgages Reverse mortgages Low-documentation loans Other non-standard loans Average balance of residential term loans to households Loans with offset facilities Interest-only mortgages Reverse mortgages Low-documentation loans Other non-standard loans ($ millions) (thousands of loans) ($ thousands) Number of entities * Loan categories are neither exhaustive nor mutually exclusive Australian Prudential Regulation Authority 26

27 Table 7c Foreign subsidiary banks' new housing loan approvals ($ million, domestic books) Foreign subsidiary banks with greater than $1 bn of term loans New residential term loans to households approved Owner-occupied 1,740 2,389 2,835 2,631 2,107 Investment 1,135 1,559 1,818 1,505 1,230 Total new residential term loans to households approved 2,875 3,949 4,653 4,136 3,338 Low-documentation loans approved Interest-only loans approved 818 1,363 1,492 1,457 1,062 Other non-standard loans approved Third-party originated loans approved 1,752 2,313 2,947 2,818 2,177 Loans approved outside serviceability New residential term loan approvals by loan-tovaluation ratio (LVR) of which: Loans approved LVR<60% 611 1,121 1,299 1, Loans approved LVR 60%-80% 1,169 1,559 1,883 1,790 1,524 Loans approved LVR 80%-90% , Loans approved LVR>90% Number of entities * Loan categories are neither exhaustive nor mutually exclusive Australian Prudential Regulation Authority 27

28 Table 8 Foreign branch banks' commercial property exposures ($ million, consolidated group) Commercial property exposures Office 1,448 1,492 1,949 1,972 2,310 Retail 3,258 3,524 3,884 3,835 4,321 Industrial Land development/subdivisions Other residential 1,309 1,322 1,263 1,224 1,386 Tourism and leisure Other 1,085 1,124 1,299 1,546 1,351 Total commercial property exposures 8,735 8,986 9,947 10,201 11,089 of which: Exposures in Australia 8,694 8,984 9,896 10,142 10,881 Impaired Commercial property exposures* of which: Exposures in Australia Specific provisions* of which: Exposures in Australia Specific provisions and security* of which: Exposures in Australia Impaired assets to exposures* 0.3% 0.4% 0.3% 0.2% 0.2% Specific provisions to exposures* 0.2% 0.3% 0.3% 0.1% 0.2% Specific provisions to impaired exposures* 69.6% 84.9% 81.3% 63.8% 88.7% Specific provisions and security held to impaired exposures* 69.6% 84.9% 86.3% 76.5% 102.0% Number of entities *Foreign branch banks may report impairments and exposures on the book of their parent Australian Prudential Regulation Authority 28

29 Explanatory notes ADI Industry Segments To assist users analyse the ADI industry, the industry is broken down into three industry segments: banks, building societies and credit unions. ADI means an authorised deposit-taking institution within the meaning of the Banking Act Banks are ADIs that assume or use the term bank in relation to their banking business. Data for banks are broken down into four segments: major banks, other domestic banks, foreign subsidiary banks and foreign branch banks. Major banks comprises the Australia and New Zealand Banking Group Limited, the Commonwealth Bank of Australia, the National Australia Bank Limited, and the Westpac Banking Corporation. Other domestic banks comprise all locally-owned banks excluding the major banks. Foreign subsidiary banks are those foreign banks authorised to carry on banking business in Australia through a locally-incorporated subsidiary. Foreign branch banks are those foreign banks authorised to carry on banking business in Australia through branches and are subject to specific restrictions on their deposit-taking activities. Building societies are locally-incorporated ADIs that assume or use the expression building society in relation to their banking business. Credit unions are locally-incorporated ADIs that assume or use the expression credit union or credit cooperative in relation to their banking business. A list of all ADIs is provided on APRA s website. Basis of preparation The basis of preparation of the statistics in this publication differs between commercial property exposures and residential property exposures. Both types of statistics are sourced from two levels of reporting by ADIs: Consolidated group book includes the exposures of the global consolidated operations of ADIs ('consolidated group'). Locally-incorporated ADIs with controlled entities or associates are required to report consolidated group book data in accordance with the Australian accounting standards AASB 127 Consolidated and Separate Financial Statements and AASB 3 Business Combinations. Licensed or domestic book includes the business of an ADI on a standalone basis, excluding subsidiaries and associates. The domestic book is the licensed book excluding offshore banking operations such as offshore branches. Commercial property exposures are sourced from the consolidated group books of the ADIs. Locally incorporated ADIs with controlled entities or associates are required to report consolidated group book data. For other ADIs, licensed and domestic book data are included. Domestic ADIs which are themselves subsidiaries of a domestic ADI are not included in commercial property exposure statistics; the data for these ADIs are included in the data for the domestic parent ADI. Residential property exposures are sourced from the domestic books of banks and the licensed books of credit unions and building societies. Commercial property exposures are facilities provided for the development, acquisition or improvement of real estate, where the servicing of the facility is dependent on cash flows from the property itself through sale or rental income and/or from cash flows generated from other properties owned by the borrower. Residential property exposures include only term loans to households which are secured by residential property. This is considerably narrower than the scope of commercial property exposures. Australian Prudential Regulation Authority 29

30 Source of statistics The data in this publication are sourced from the following returns submitted to APRA under the Financial Sector (Collection of Data) Act 2001 by ADIs. ARF Commercial Property (Licensed ADI and Consolidated Group Books) ARF Housing Loan Reconciliation (Domestic or Licensed ADI Books) ARF Statement of Financial Position (Domestic Books) ARF Statement of Financial Position (Licensed ADI) Blank copies of returns and associated instructions are available on APRA's website. Estimation of commercial property statistics The Quarterly Authorised Deposit-taking Institution Property Exposures publication includes commercial property exposure statistics for all ADIs for the March and September quarters only, until September From December 2008 onwards, statistics are included on a quarterly basis. In the March and September quarters, all ADIs are required to report their commercial property exposures. Therefore, statistics are available for all ADIs in these quarters. In the June and December quarters, only a sample of banks are required to report their commercial property exposures, with the remaining ADIs exposures estimated using their previous quarters exposures. This sample comprises those banks which have the largest commercial property exposures and together they hold approximately 99 per cent of total ADI commercial property exposures. Comparison to Australian Bureau of Statistics Housing Finance The Quarterly Authorised Deposit-taking Institution Property Exposures publication includes statistics on new residential term loan approvals. A similar source of statistics is Australian Bureau of Statistics (ABS) publication Housing Finance. For ADIs, the primary source of the ABS Housing Finance statistics is APRA s data collections. However, there are small conceptual differences users should be aware of when comparing the two publications. ABS dwelling commitments in the Housing Finance publication exclude land purchases and alterations to property in the key statistics. These are reported by ADIs each month, ten business days after the end of the month. New residential loan approvals in this publication are for term loans only and include land purchases and alterations. These are reported by ADIs holding a balance of more than $1 billion in housing term loans at the end of the quarter. The returns are due 15 business days after the end of the quarter for credit unions and building societies and 20 business days after the end of the quarter for banks. The differences in scope lead to small differences in the value of new loans in each publication. Australian Prudential Regulation Authority 30

31 Glossary ADI refers to an authorised deposit-taking institution, meaning a body corporate authorised under section 9 of the Banking Act 1959, to carry on banking business in Australia (e.g. a bank, building society or credit union). Building societies are locally-incorporated ADIs that assume or use the expression building society in relation to their banking business. Commercial property exposures are facilities for the development, acquisition and improvement of real estate, where the servicing and repayment of the facility is dependent on cash flows generated by the property itself or other properties owned by the borrower. Excluded are housing loans for owner occupation and loans to individuals or families for residential-property investment. Loans to construction companies which are paid by third parties are also excluded, where such payment is not dependent on the proceeds of the sale or rental of the property upon completion. Commercial property exposures: Industrial are facilities for the development, acquisition or improvement of Industrial property, and the servicing and repayment of the facility is dependent on the cash flows generated by the Industrial property itself through sale or rental income, and/or from cash flows generated from other Industrial properties owned by the borrower. Commercial property exposures: Land development/subdivisions are facilities for the development and/or subdivision of land, and the servicing and repayment of the facility is dependent on the cash flows generated through sale of the land, and/or from cash flows generated from other land development or subdivision activity owned by the borrower. Commercial property exposures: Office are facilities for the development, acquisition or improvement of office buildings, and the servicing and repayment of the facility is dependent on the cash flows generated by the office property itself through sale or rental income, and/or from cash flows generated from other office properties owned by the borrower. Commercial property exposures: Other residential are exposures to residential property excluding all loans to individuals or families and excluding loans to private family companies or family trusts for owner occupation. Commercial property exposures: Retail are facilities for the development, acquisition or improvement of retail buildings, and the servicing and repayment of the facility is dependent on the cash flows generated by the retail property itself through sale or rental income, and/or from cash flows generated from other retail properties owned by the borrower. Commercial property exposures: Tourism and leisure are facilities for the development, acquisition or improvement of land and buildings used in the tourism and leisure or hospitality industries, and the servicing and repayment of the facility is dependent on the cash flows generated by the property itself through sale or rental income, and/or from cash flows generated from other tourism and leisure properties owned by the borrower. Credit unions are locally-incorporated ADIs that assume or uses the expression credit union or credit co-operative in relation to their banking business. Foreign bank branches are foreign banks licensed to conduct banking business in Australia through branches, subject to a condition which specifically restricts the acceptance of retail deposits (referred to as Foreign ADIs under the Banking Act). Foreign subsidiary banks are foreign banks authorised to carry on banking business in Australia through a locally incorporated subsidiary. Housing loans includes loans for the construction or purchase of dwellings for owner-occupation and investment. Interest-only loans approved are interest-only term loans held by the reporting party and which were approved during the relevant period, irrespective of whether the funds have been advanced to the borrower. Interest-only loans are loans where the repayments, for a set term, only pay the interest on the loan and do not reduce the principal balance. Investment loans are loans to households for the purchase or construction of dwellings not for occupation by the owners. Loan-to-valuation ratio (LVR) is the ratio of the outstanding amount of the loan to the value of the property that secures the exposure. Loans approved LVR<60% are loans approved with a loan-to-valuation ratio less than 60 per cent during the quarter. Loans approved LVR 60%-80% are loans approved with a loan-to-valuation greater than or equal to 60 per cent but less than 80 per cent during the quarter. Loans approved LVR 80%-90% are loans approved with a loan-to-valuation greater than or equal to 80 per cent but less than 90 per cent during the quarter. Loans approved LVR>90% are loans approved with a loan-to-valuation greater than or equal to 90 per cent during the quarter. Loans approved outside serviceability are loans approved where the lender believes that an exception to the institution s serviceability policy is appropriate. Australian Prudential Regulation Authority 31