Lending Trends In December 2017 – Still About Home Loans!

The RBA released their credit aggregate data to end December 2017 today.  $1.1 billion of loans were reclassified in the month (we guess AMP).

They report that lending for housing grew 6.3% for the 12 months to December 2017, the same as the previous year, and the monthly growth was 0.4%.  Business lending was just 0.2% in December and 3.2% for the year, down on the 5.6% the previous year.  Personal credit was flat in December, but down 1.1% over the past year, compared with a fall of 0.9% last year. This is in stark contrast to the Pay Day Loan sector, which is growing fast, as we discussed yesterday (and not in the RBA data).

Total credit grew 0.3% in the month, and 4.8% for the year, so mortgage lending is still supporting overall growth, lifting the record household debt even higher. We need still tighter regulatory controls – especially as the costs of living continue to outstrip wage growth.

The annual trends show that investor lending is slowing a little, but still stands at 6.1% seasonally adjusted. Owner occupied lending is running at 6.4% over the last year.  34.1% of loans are for investment purposes.

The monthly data is very noisy as usual.

The value of owner occupied loans was $1.13 trillion, up $6.3 billion or 0.6%, seasonally adjusted; investment loans were $587 billion up $2 billion or 0.3%, seasonally adjusted; other personal credit $151 billion, down 0.2% or 0.3 billion and business lending was $908 billion, up $0.8 billion or 0.1%.

The data contains various health warnings:

All growth rates for the financial aggregates are seasonally adjusted, and adjusted for the effects of breaks in the series as recorded in the notes to the tables listed below. Data for the levels of financial aggregates are not adjusted for series breaks. Historical levels and growth rates for the financial aggregates have been revised owing to the resubmission of data by some financial intermediaries, the re-estimation of seasonal factors and the incorporation of securitisation data. The RBA credit aggregates measure credit provided by financial institutions operating domestically. They do not capture cross-border or non-intermediated lending.

Following the introduction of an interest rate differential between housing loans to investors and owner-occupiers in mid-2015, a number of borrowers have changed the purpose of their existing loan; the net value of switching of loan purpose from investor to owner-occupier is estimated to have been $62 billion over the period of July 2015 to December 2017, of which $1.1 billion occurred in December 2017. These changes are reflected in the level of owner-occupier and investor credit outstanding. However, growth rates for these series have been adjusted to remove the effect of loan purpose changes.

Home Lending Accelerates In December

The latest data from APRA, the monthly banking stats for ADI’s shows a growth in total home loan balances to $1.6 trillion, up 0.5%. Within that, lending for owner occupation rose 0.59% from last month to $1.047 trillion while investment loans rose 0.32% to $553 billion. 34.56% of the portfolio are for investment purposes.

The monthly ADI trends show this clearly (the blip in August was CBA adjustments). Growth accelerated across all loans, and within each type.

The portfolio movements within institutions show that Westpac is taking the lions share of investment loans (we suggest this involves significant refinancing of existing loans), CBA investment balances fell, while most other players were chasing owner occupied loans. Note the AMP Bank, which looks like a reclassification exercise.

Overall market shares remain stable, with CBA holding the largest share of owner occupied loans and Westpac leading on investment loans.

The 10% speed limit for investment loans is less interesting, given the 12 month average grow of 2.4%, but most of the majors are well below the 10%. Westpac is the major growing its investment book fastest, while CBA is in reverse. Clearly different strategies are in play.

Standing back, the momentum in lending is surprisingly strong, and reinforces the need to continue to tighten lending standards. This does not gel with recent home price falls, so something is going to give. Either we will see home prices start to lift, or mortgage momentum will sag. Either way, we are clearly in uncertain territory. Given the CoreLogic mortgage leading indicator stats were down, we suspect lending momentum will slide, following lower home prices. We publish our Household Finance Confidence Index shortly where we get an updated read on household intentions.

The RBA data comes out shortly, and we will see what adjustments they report, and momentum in the non-bank sector.

Mortgage Stress Still With Us In 2018

Digital Finance Analytics has released the January 2018 mortgage stress and default analysis update. Across Australia, more than 924,000 households are estimated to be now in mortgage stress (last month 921,000). This equates to 29.8% of households. In addition, more than 20,000 of these are in severe stress, down 4,000 from last month.

In this video we discuss the results, and count down the top 10 most stressed post codes this month.

We estimate that more than 51,500 households risk 30-day default in the next 12 months, down 500 from last month. We expect bank portfolio losses to be around 2.7 basis points, though with losses in WA are likely to rise to 4.9 basis points. Some households have benefited from refinancing to cheaper owner occupied loans, giving them a little more wriggle room in terms of cash flow. The typical transaction has saved up to 45 basis points or $187 each month on a $500,000 repayment mortgage.

Martin North, Principal of Digital Finance Analytics said “the number of households impacted are economically significant, especially as household debt continues to climb to new record levels. Mortgage lending is still growing at three times income. This is not sustainable and we are expecting lending growth to moderate in the months ahead”. The latest household debt to income ratio is now at a record 199.7.[1]

Risks in the system continue to rise, and while recent strengthening of lending standards will help protect new borrowers, there are many households currently holding loans which would not now be approved. This is a significant sleeping problem and the risks in the system are higher than many recognise.

As a result, many Australian households are heavily indebted and large segments of the community and the nation are highly susceptible to future harm. With these settings, Gill North (a professor of law at Deakin University and joint principal of Digital Finance Analytics) “expects a significant escalation of legal actions against lenders during the next decade.”

National responsible lending regimes have operated in Australia since 2009, with the stated aims to encourage prudent lending, curtail undesirable market practices, and impose sanctions for irresponsible lending and leasing. These regimes require credit providers to ensure a loan is suitable for the borrower (or more precisely, that it is not unsuitable). When doing so, lenders must consider the ability of the consumer to repay the loan and must verify their financial capacity to meet the relevant commitments. The Australian Securities and Investments Commission (ASIC) is required to supervise and enforce these provisions and has various powers under the National Consumer Credit Protection Act 2009 (Cth). ASIC has already challenged some lenders regarding their lending practices. However, when external conditions in Australia deteriorate and or levels of financial stress and loan defaults rise acutely, a wave of responsible lending actions seems inevitable.

Our analysis uses the DFA core market model which combines information from our 52,000 household surveys, public data from the RBA, ABS and APRA; and private data from lenders and aggregators. The data is current to end January 2017. We analyse household cash flow based on real incomes, outgoings and mortgage repayments, rather than using an arbitrary 30% of income.

Households are defined as “stressed” when net income (or cash flow) does not cover ongoing costs. Households in mild stress have little leeway in their cash flows, whereas those in severe stress are unable to meet repayments from current income. In both cases, households manage this deficit by cutting back on spending, putting more on credit cards and seeking to refinance, restructure or sell their home.  Those in severe stress are more likely to be seeking hardship assistance and are often forced to sell.

The forces which are lifting mortgage stress levels remain largely the same. In cash flow terms, we see households having to cope with rising living costs – notably child care, school fees and fuel – whilst real incomes continue to fall and underemployment remains high. Households have larger mortgages, thanks to the strong rise in home prices, especially in the main eastern state centres, but now prices are slipping. While mortgage rates remain quite low for owner occupied borrowers, those with interest only loans or investment loans have seen significant rises.  We expect some upward pressure on real mortgage rates in the next year as international funding pressures mount, a potential for local rate rises and margin pressure on the banks.

Probability of default extends our mortgage stress analysis by overlaying economic indicators such as employment, future wage growth and cpi changes.  Our Core Market Model also examines the potential of portfolio risk of loss in basis point and value terms. Losses are likely to be higher among more affluent households, contrary to the popular belief that affluent households are well protected.

Regional analysis shows that NSW has 254,343 households in stress (258,572 last month), VIC 254,028 (254,485 last month), QLD 158,534 (156,097 last month) and WA 125,994 (121,934 last month). The probability of default rose, with around 9,800 in WA, around 9,500 in QLD, 13,000 in VIC and 14,000 in NSW.

The largest financial losses relating to bank write-offs reside in NSW ($1.3 billion) from Owner Occupied borrowers) and VIC ($910 million) from Owner Occupied Borrowers, which equates to 2.07 and 2.74 basis points respectively. Losses are likely to be highest in WA at 4.9 basis points, which equates to $753 million from Owner Occupied borrowers.

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[1] RBA E2 Household Finances – Selected Ratios September 2017

Westpac to Tighten Borrowing Terms

From Australian Broker.

Westpac will announce changes to its borrowing terms and conditions for local and foreign housing property buyers on partner visas next Monday, said a report.

The Australian Financial Review reported yesterday (30 January) that the changes will restrict appraisal of residential values, borrowers’ ability to repay, and eligible visas for housing loan applications.

The bank will tighten lending to holders of 309 and 820 partner visas, which allow the partner or spouse of an Australian citizen, permanent resident, or eligible New Zealand citizen to live in Australia. Borrowers on the partner visas will need an LVR of 80%, down from the current 90%.

On the other hand, the bank is relaxing its terms for borrowers relying on income from a second job. Instead of two years, borrowers need to have held a second job with the same employer for only one year, for their income to be acceptable. Borrowers and brokers are expected to welcome this, given the growing number of casual workers in Australia.

The report also said that Westpac is updating its household expenditure measure, which is used to assess borrowers’ ability to repay their loans. It did not specify what changes are being introduced.

Meanwhile, desktop valuations – which are based on computerised or photographic evidence – will be used only for a maximum LVR of 90%.

Greg Cook, senior credit advisor at mortgage brokerage firm Loan Market, welcomed these changes, saying that the banks are working to ensure that they have good credit policies in place for borrowers, in case there is a downturn.

“The more the banks look at their lending practices, the stronger our industry is. The more that they change their policies on a regular basis, the more valuable the mortgage broker is,” he said.

The new changes follow Westpac’s announcement last month that it would require home loan borrowers to disclose what they owe on short-term buy-now, pay-later loans on digital credit platforms like AfterPay and ZipPay. The move was part of the bank’s effort to bolster its assessment of borrowers’ loan serviceability.

The bank said then that borrowers with such loans have liabilities that must be captured in the loan application, along with the monthly repayment.

Business Confidence Stronger – NAB

The recently released NAB monthly business survey to December 2017 reports a strong business sector in Australia at present, with conditions holding steady at well-above average levels and confidence almost catching up this month.

The business confidence index bounced 4pts to +11 index points, the highest level since July 2017, perhaps driven by a stronger global economic backdrop and closes the gap between confidence and business conditions.

Business confidence is strongest in trend terms in Queensland and SA and to a lesser extent NSW. Confidence is also reasonable in WA, and is in line with business conditions in the state. Victoria and Tasmania meanwhile are reporting levels of confidence which are lower than their reported level business conditions.

Mining and construction are the most confident, with the latter picking up in recent months after trending down between July and October, suggesting that a positive outlook for non-residential construction may be offsetting any concerns around apartment oversupply and a slowdown in the Sydney housing market. In contrast, retail confidence is surprisingly strong, and well above reported conditions. The retail industry has been a consistent underperformerin the NAB Business Survey, and is the only industryreporting negative business conditions.

The employment index pulled back a little in December, and while it remains consistent with a solid rate of job creation, it does suggest employment growth may ease back from current extraordinary heights.

But whether this will begin to lift wages growth is another question, with labour costs rising.

How Australian Regulators Would Handle a Cryptocurrency Hack Like Coincheck

From The Conversation.

New risk rules for cryptocurrency exchanges will be put to the test with the latest hack on Japanese exchange Coincheck. Hackers stole US$660 million worth of NEM (its native cryptocurrency).

In the past eight years, more than a third of all cryptocurrency exchanges have been hacked. The total losses exceed US$1 billion. Because cryptocurrencies are almost untraceable, the rate of recovery after a hack is very low.

A number of countries (including Australia) have enacted legislative provisions to regulate the conduct of cryptocurrency exchanges. Regulators hope these will reduce the risk of attack and make operators more accountable for losses suffered by customers when an attack does occur.

These hacks don’t just expose gullible investors to risk. They mean funds could be flowing undetected into the hands of money launderers and terrorists.

While cryptocurrency exchanges may operate like banks, they are not regulated in the same way as banks. There is no depositor’s insurance and most exchanges remain unregulated.

Due to the almost anonymity afforded to users of Bitcoin and other cryptocurrencies, it is very difficult to trace missing funds. When a hack occurs, the attacker gains access to the virtual wallet operated by the exchange and then transfers the cryptocurrency to their own virtual wallet.

The Coincheck Hack

The Japanese exchange Coincheck hack dwarfs an earlier hack on Bitcoin exchange platform Mt Gox in 2014, which saw the theft of US$480 million worth of Bitcoin.

The operator of Mt Gox, Mark Karpeles was arrested and jailed for his role in the collapse. At the time Mt Gox was the world’s biggest Bitcoin exchange.

He was charged with falsifying records and embezzlement, but there were no laws in place at the time to regulate the Mt Gox exchange and its trade in Bitcoin.

So as to bring virtual currency exchanges in line with international anti-money laundering and counter-terrorism financing measures, Japanese lawmakers enacted the Amended Settlement Act. Under these new laws, all exchanges operating in Japan must register and comply with rules. These rules include knowing their customers, employing sufficient staff, keeping balance sheets, and (critically) must keep all customers’ deposits in “cold storage” (that is, on a computer hard drive that is not accessible via the internet).

These new laws mean that when an exchange is hacked or collapses, operators can be made liable for the way that they managed their customers’ funds. Japanese authorities are threatening to prosecute the operators of Coincheck for their failure to comply with the new laws.

In their online apology, the operators of Coincheck have admitted that the hacked deposits were in a “hot wallet” (connected to the internet instead of being offline) and that this was due to “staff shortages”. Both of these failures to comply will give the Japanese authorities good reason to prosecute.

Close scrutiny of the accounts will be likely to reveal other irregularities. But this is little comfort for Coincheck’s investors. Coincheck has promised to return 90% of the lost NEM to its customers, but has yet to say how or when this will happen.

How would Australia’s regulator react?

Japan is not alone in its scramble to regulate cryptocurrency exchanges. Just this month, the Australian government announced the Australian Transaction Reports and Analysis Centre (AUSTRAC) will have new powers to monitor Bitcoin and other cryptocurrencies. New legislation also forces cryptocurrency exchanges to disclose details of investors and transactions.

The new laws are part of the government’s efforts to combat money laundering and terrorism financing. Exchanges will be required to identify customers more stringently and report suspicious transactions.

All transactions of A$10,000 or more must reported to AUSTRAC. The report must include the names of the customers conducting the transaction, the names of the the recipient of the proceeds of the transaction, and how the transaction was effected.

Any failure by an operator to comply with these laws would result in heavy fines and possibly imprisonment. However, as breaches are almost impossible to detect, enforcement of these laws depends on honesty of the exchange.

One way to detect reportable transactions is to monitor the size of the deposits made into the exchange’s bank account. However, individuals can create fake trading accounts and money-laundering syndicates breakup deposits into smaller amounts, so as to avoid raising suspicion.

Complying with AUSTRAC’s new regulations will be expensive for exchanges. With Australia’s new data breach notification laws coming into effect next month, gathering and securing sensitive information about customers and their deposits will be more onerous than ever.

The problem that faces regulators and investors is that the cost of compliance acts as a deterrent to registration. And because registration requires compliance, exchanges need to outlay significant capital before they start to trade. The sheer size of Coincheck’s losses indicates it was a high-volume exchange and yet, at the time of the hack, its registration was still pending.

Traditionally, when a foreign exchange collapses and is unable to return customers’ deposits, the regulator might prosecute the directors for operating without a licence, failure to comply with financial services regulations, or for insolvent trading. Insolvent trading, for example, attracts both civil and criminal sanctions.

When a cryptocurrency exchange is hacked, the operators and their customers are all victims, but the operators will be made liable for those losses. Under Australia’s current laws, a major hack of a cryptocurrency exchange will be met with similar challenges as those facing the Japanese authorities in the wake of the Coincheck theft.

Any investigation of an exchange could involve the Australian Securities and Investments Commission (ASIC), the Australian Taxation Office (ATO) and AUSTRAC. The level of scrutiny that would follow, could reveal a multitude of sins, including some that are unrelated to the hack.

For example, ASIC has the power to prosecute for insolvent trading, operating a Ponzi Scheme and breaches of financial services legislation. The ATO could investigate whether GST was being paid on trades.

Frustratingly for the customers and investors, seeing the operators punished does not reimburse them for their financial losses. Repaying deposits after a hack depends on whether the operators remain in the jurisdiction and have any funds of their own.

Author: Philippa Ryan, Lecturer in Commercial Equity and Disruptive Technologies and the Law, University of Technology Sydney

What Does CBA And The BBSW Case Mean?

Just 24 hours after the announcement of a new CEO, when we were assured that CBA were well on the way to addressing their known issues; ASIC lobbed a bombshell in the shape of the BBSW case.

CBA said today:

Commonwealth Bank has fully co-operated with ASIC’s investigation over the last two years.

Commonwealth Bank disputes the allegations made by ASIC. As this matter is before the courts, it is not appropriate to comment further at this time.

Put to one side whether CBA was part of the group of banks that fixed the pricing of BBSW, and the knock-on effect on product pricing; surely this issue was on the “risk” list in the bank, and should have been disclosed.

If it was not, it should have been. This may once again speak to cultural issues in the organisation.  There is clearly much to fix.  What else is on the risk list?

We discussed the implications on 2GB with Ross Greenwood.

More broadly, we have to consider whether the sheer complexity of the organisation is part of the problem. Perhaps CBA should be split into a series of small entities, for example, separated into its retail division, corporate, wealth, insurance and trading divisions. The question of whether CBA is simply too big and complex to manage, is in our view the underlying and most critical question to be addressed.

 

ASIC commences civil penalty proceedings against Commonwealth Bank of Australia for BBSW conduct

ASIC has today commenced legal proceedings in the Federal Court in Melbourne against the Commonwealth Bank of Australia (CBA) for unconscionable conduct and market manipulation in relation to CBA’s involvement in setting the bank bill swap reference rate (BBSW) between 31 January 2012 and October 2012.

The BBSW is the primary interest rate benchmark used in Australian financial markets and was administered by the Australian Financial Markets Association (AFMA) during the relevant period. On 27 September 2013, AFMA changed the method by which the BBSW is calculated. The conduct that the proceedings relate to occurred before this change in methodology. Since 1 January 2017 ASX Limited has been the administrator of the BBSW, introducing a new Volume Weight Average Price (VWAP) based calculation methodology.

During the relevant period CBA had a large number of products which were priced or valued off BBSW. ASIC alleges that on three specific occasions CBA traded with the intention of affecting the level at which BBSW was set so as to maximise its profits or minimise its losses to the detriment of those holding opposite positions to CBA’s.

ASIC alleges it was unconscionable for CBA to trade in this way, and also to enter into products priced off the BBSW without disclosing its trading practices to its customers and counterparties. ASIC also alleges that CBA’s trading  created an artificial price and a false appearance with respect to the market for some of these products.

ASIC is seeking declarations that CBA contravened s12CA, s12CB, s12DA, 12DB and s12DF of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act), s912A(1), s1041A, s1041B and s1041H of the Corporations Act 2001 (Cth) (Corporations Act).

Further, ASIC has sought from the Court pecuniary penalties against CBA and an order requiring CBA to implement a compliance program.

ASIC will be making no further comment at this time.

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Background

ASIC commenced legal proceedings in the Federal Court against the Australia and New Zealand Banking Group (ANZ) on 4 March 2016 (refer: 16-060MR) and against National Australia Bank (NAB) on 7 June 2016 (refer: 16-183MR).

On 10 November 2017, the Federal Court made declarations that each of ANZ and NAB had attempted to engage in unconscionable conduct in attempting to seek to change where the BBSW set on certain dates and that each bank failed to do all things necessary to ensure that they provided financial services honestly and fairly. The Federal Court imposed pecuniary penalties of $10 million on each bank (refer: [2017] FCA 1338).

On 20 November 2017, ASIC accepted enforceable undertakings from ANZ and NAB which provides for both banks to take certain steps and to pay $20 million to be applied to the benefit of the community, and that each will pay $20 million towards ASIC’s investigation and other costs (refer: 17-393MR).

On 5 April 2016, ASIC commenced legal proceedings in the Federal Court against the Westpac Banking Corporation (Westpac) (refer: 16-110MR). The matter is awaiting judgment.

ASIC has previously accepted enforceable undertakings relating to BBSW from UBS-AG, BNP Paribas and the Royal Bank of Scotland (refer: 13-366MR, 14-014MR, 14-169MR). The institutions also made voluntary contributions totaling $3.6 million to fund independent financial literacy projects in Australia.

In July 2015, ASIC published Report 440, which addresses the potential manipulation of financial benchmarks and related conduct issues.

The Government has recently introduced legislation to implement financial benchmark regulatory reform and ASIC has consulted on proposed financial benchmark rules.

Pay Day Lending Still Running Hot

We monitor Pay Day lending – or Small Amount Credit Contracts (SACC) – as they should be called, via our surveys. We have just run our 2017 updates, and we find that SACC lending is still growing, and well above inflation and wage growth. A symptom of financial stress in the community .

Watch the video, or read the post.

But SACC lenders are targeting different borrowers now, and mainly via online channels.

This first chart shows the relative lending flows split by distressed households and stressed households. Stressed households, we define as those with cash flow problems (often thanks to poor budgeting or over commitment) but many will have other financial assets, and even may own property.  Most will be in employment. Lenders are targeting this group (especially using TV, radio and online channels) and there has been substantial growth.

Distressed households are those under financial pressure, often with limited employment, and are very likely to be on Government assistance. Recent tightening of the lending rules has reduced the share of lending to these distressed groups – which is a good thing.

The overall net effect is the total lending from Pay Day providers, including the many online players – has risen to around $842m flow and $994m stock. Growth in 2015 -2016 was 10.7% and 2016-17 was 14.5%. We expect growth at least 10% in 2018, perhaps higher.

The share of loans originated online continues to rise, from 48% in 2015, to more than 75% now, and it will continue to rise further. These online services are easy to access, and borrowers, once they sign up can get “special” deals.

The online environment is of course hard to police, but the interest rates offered by many players are right at the top end of the allowable range.

The latest changes to the SACC legislation are still in the works.  But we think there should be a further review looking at the online lending environment. This is clearly where the action (and risks) are.   By plugging the lending to our most vulnerable households, the industry has regrouped around more affluent but needy connected households. There are more to target, and the prospect of substantial growth.

For an outline and critique of the proposed payday lending* reforms, see the following articles by Gill North (Professor of Law at Deakin University and Joint Principal of Digital Finance Analytics)

  • ‘Small Amount Credit Contract Reforms in Australia: Household Survey Evidence & Analysis’ (2016) 27 Journal of Banking and Finance Law and Practice 203
  • ‘Small Amount Credit Contract Reforms: Will the Affordability Cap Achieve Its Intended Objectives Without Unintended Adverse Consequences?’ (2017) 32 Australian Journal of Corporate Law 1
  • ‘Small Amount Credit Contract Reforms: Have Transparency and Competition Concerns Been Forgotten?’ (2017) 25 Competition & Consumer Law Journal 101

Draft versions of these papers are available at https://ssrn.com/author=905894

Defined as “small amount credit contracts” in the National Consumer Credit Protection Act 2009 (Cth)

Personal Insolvencies Sharply Higher

The latest data from The Australian Financial Security Authority, for the December 2017 quarter shows a significant rise in personal insolvency – a bellwether for the financial stress within the Australian community.

The total number of personal insolvencies in the December quarter 2017 (7,578) increased by 7.4% compared to the December quarter 2016 (7,055). This year-on-year rise follows a rise of 8.0% in the September quarter 2017.

Total personal insolvencies increased in all states and territories in the December quarter 2017, in year-on-year terms.

Quarterly total personal insolvencies remain below the historical peaks reached in 2008–09 and 2009–10 (more than 9,000 personal insolvencies).

The number of bankruptcies increased by 1.3% in year-on-year terms, from 3,976 in the December quarter 2016 to 4,029 in the December quarter 2017. This follows a 0.1% year-on-year rise in the September quarter 2017. Bankruptcies constituted 53.2% of total personal insolvencies, falling from 56.4% in the December quarter 2016.

The number of bankruptcies rose in year-on-year terms in the December quarter 2017 in all states and territories except Victoria, Queensland and South Australia.

In December quarter 2017, the number of debt agreements fell to 3,500 from the record high of 3,885 in the September quarter 2017.

In year-on-year terms, debt agreements rose by 15.3% from the December quarter 2016. This is the tenth consecutive quarter in which debt agreements have increased in year-on-year terms.

Debt agreements constituted 46.2% of total personal insolvencies, rising from 43.0% in the December quarter 2016.

Debt agreements increased in year-on-year terms in all states and territories in the December quarter 2017. Debt agreements in New South Wales reached a record quarterly high of 1,084 debt agreements in the December quarter 2017. There were 51 debt agreements in the Northern Territory (NT) in the December quarter 2017. Debt agreements in the NT also reached this record in the September quarter 2016.

Quarterly personal insolvency agreement levels fluctuate proportionally more than those of bankruptcies and debt agreements as levels are relatively small.

The number of personal insolvency agreements increased by 14.0% in the December quarter 2017 (49) compared to the December quarter 2016 (43).

This is the sixth consecutive quarter in which personal insolvency agreements have increased in year-on-year terms.