They released their annual points of presence data that showed an 11 per cent fall in bank branches nationally in 12 months. It triggered HEADLINES around Australia last week screamed out about bank closures. Channel Nine was one of many media outlets that picked up the story, reporting 424 branches had “shut their doors for the final time”.
As Dale writes, the problem is APRA never actually said that.
“The latest statistics show a further decline in bank branches in the year to 30 June 2023, with a reduction of 424 branches across Australia (11 per cent), including 122 branches (7 per cent) in regional and remote areas. This continues a trend that has seen branch numbers decline by 34 per cent in regional and remote areas, and 37 per cent overall, since the end of June 2017.”
What unsuspecting media did not pick up on was that among those 424 branches were a number of sites that had been stripped of branch status because they no longer provided the level of service required to be classified as such by law.
The doors are still very much open but they are among the growing number of banks that have no tellers and customers can only get cash from an ATM.
So we are left with what could be described as a bit of a situation, according to Dale. I think it is more deliberate, as APRA again manages to hide the real story – on this they have form, given their close alignment to the Banks. They are in my view hardly independent, nor an effective regulator.
They released their annual points of presence data that showed an 11 per cent fall in bank branches nationally in 12 months. It triggered HEADLINES around Australia last week screamed out about bank closures. Channel Nine was one of many media outlets that picked up the story, reporting 424 branches had “shut their doors for the final time”.
As Dale writes, the problem is APRA never actually said that.
“The latest statistics show a further decline in bank branches in the year to 30 June 2023, with a reduction of 424 branches across Australia (11 per cent), including 122 branches (7 per cent) in regional and remote areas. This continues a trend that has seen branch numbers decline by 34 per cent in regional and remote areas, and 37 per cent overall, since the end of June 2017.”
What unsuspecting media did not pick up on was that among those 424 branches were a number of sites that had been stripped of branch status because they no longer provided the level of service required to be classified as such by law.
The doors are still very much open but they are among the growing number of banks that have no tellers and customers can only get cash from an ATM.
So we are left with what could be described as a bit of a situation, according to Dale. I think it is more deliberate, as APRA again manages to hide the real story – on this they have form, given their close alignment to the Banks. They are in my view hardly independent, nor an effective regulator.
Concurrent with the current Regional Branch Inquiry, APRA has announced a review of its Points Of Presence Data. This is welcome, because the current data contains many inaccuracies, and we need good data to ensure adequate transparency in terms of access to banking services.
On 31st March the RBA and APRA released their latest monthly data to end February. There was significant evidence of loan growth easing back – a consequence of higher rates and tighter underwriting resulting from the change. That said, another record was breached.
Just before Christmas APRA advised the imposition of a 1% Counter Cyclical Capital Buffer on Australian Banks. Interesting timing, seeing as the Bank For International Settlements had set 2023 as the required date. Up to this point APRA has argued a 1% buffer was not needed in Australia – so what changed?
So, we wonder, are they being forced to comply. and what does this mean for our “strong” banks as interest rates rise and lending slows?
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The latest data to end November 2022 from the RBA and APRA shows that the rate of credit growth is slowing – presumably due to higher rates and reduced borrowing power. That said refinancing including equity draw-down is on the rise…
http://www.martinnorth.com/
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Given we now have mortgage rates 3% higher than at the start of the year – analysts are asking whether there are yet signs of mortgage portfolio risks in the banking system.
We certainly know that households cash flows are under pressure, from our own mortgage stress analysis, and Roy Morgan’s research on consumer confidence and their own mortgage stress analysis.
And we know that APRA’s 3% “Buffer” is being breached now, and it is even worse when they had set a 2% buffer earlier on.
But all that said, there is a lag between rate rises and delinquency – of months, if not years, so I would not be expecting much movement yet – that comes later. This also aligns with recent incoming data too.
For example, according to the latest Quarterly Statistics from APRA, the banks wrote fewer high loan-to-value ratio mortgages and decreased high debt-to-income lending over the September quarter, which the prudential regulator has welcomed.
They welcomed the fact that the banks have been “improving” the risk characteristics of their new residential mortgage lending, after finding that both high debt-to-income (DTI) and high LVR lending had reduced over the September quarter and suggested that the figures were largely promising given the strength of the banks’ profitability and liquidity positions as well as the reduction in “riskier” lending.
Today’s post is brought to you by Ribbon Property Consultants.
Digital Finance Analytics (DFA) Blog
Are There Signs Of Bank Mortgage Portfolio Stress Yet?
A bunch of stats from the ABS , RBA and APRA. CPI was down a bit but largely due to rebaselining. The Trimmed Mean was unchanged.
Building approvals were down (again) and the latest data on lending shows an easing.
Net net, not enough to shift the RBA very far – 25 basis points next Tuesday is still most likely.
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And we discuss an alternative to the Major Banks who are closing outlets to secure profits for shareholders – the Customer Owned Banks. There are nearly 60 across the country focused on their members (customers) offering lower risk, more competitive banking services, including local branches.
You can find a list of local members here: https://www.customerownedbanking.asn.au/about-coba/list-of-our-members
So, I recommend switching to these community banks, away from the Majors. Funnily enough often the COBA banks offer better rates, and service than the others, and have the highest customer satisfaction!
Finally, digital is fine until the power goes out, and cash is still needed to maintain viable and dynamic local communities!
The latest edition of our finance and property news digest with a distinctively Australian flavour.
Go to the Walk The World Universe at https://walktheworld.com.au/
