ANZ Banking Group executive Mike Smith revealed his growing concern at how increasing interest rates affect the ability of some consumers to repay their mortgages.
Mr. Smith’s remarks followed Westpac Chief Gail Kelly’s, who had earlier acknowledged an increase in consumer arrears, although not to a level that would land a bank in deficit.
Mr. Smith believes that the poor credit quality at this time is strange, because it usually occurs during periods of increased unemployment.
He said that it now seems to be seasonally related, noting “a little bit” of a condition where people were spending on holidays and not repaying the monthly debt on their credit cards.
“But I think that interest rates are beginning to hurt a little bit now, so the recent rises are beginning to bite,” Mr. Smith said, adding that the flood in Queensland had also contributed to the issue.
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