Financial Stability Review – September 2005 List of tables

Table 1: World GDP Growth
Year-average, per cent(a)
2004 2005 2006
Consensus forecasts
(September 2005)
United States 4.2 3.5 3.3
Euro area 2.1 1.3 1.7
Japan 2.7 2.0 1.8
China 9.5 9.1 8.1
Other east Asia(b) 5.8 4.3 4.8
Australia's trading partners(c) 4.9 3.9 3.8
World 5.1 4.3 4.3

(a) Aggregates weighted by GDP at PPP exchange rates unless otherwise specified
(b) Weighted using market exchange rates
(c) Weighted using merchandise export shares

Sources: CEIC; Consensus Economics; IMF; RBA; Thomson Financial

Table 2: House Prices
Year-ended percentage change to June 2005
ABS APM(a)(b) CBA REIA(a)
Sydney −5.0 −4.8 −6.8 −3.9
Melbourne −1.4 1.0 −3.0 −2.0
Brisbane 1.8 1.1 1.6 0.6
Adelaide 7.0 4.6 12.0 3.8
Perth 11.7 13.1 7.0 16.5
Canberra 2.5 −0.2 −8.7 −6.0
Australia −0.1 0.0 −1.4 −0.4

(a) Preliminary
(b) Composition-adjusted median

Sources: ABS; APM; CBA; REIA

Table 3: Banks' Return on Assets and Equity(a)
Before-tax earnings, per cent
Sample Return on Assets Return on Equity
2002 2003 2004 2002 2003 2004
Australia 4 1.5 1.4 1.4 21.9 20.6 19.2
United States 19 1.8 2.1 1.7 21.0 24.9 19.3
Canada 5 0.6 1.0 1.2 11.8 18.9 22.6
Japan 9 −0.8 0.2 0.4 −24.8 4.7 9.2
United Kingdom 7 0.9 1.1 1.2 16.8 19.2 20.4
France 6 0.5 0.6 0.7 12.4 14.2 16.0
Germany 9 0.0 −0.1 0.2 0.1 −2.6 5.2
Italy 6 0.5 0.8 0.9 9.2 13.1 15.1
Sweden 4 0.6 0.8 1.0 15.3 17.9 22.6
Other Europe 18 0.5 0.7 0.8 10.7 16.2 18.7

(a) Annual results for selected large banks as ranked by Tier 1 capital.

Sources: Banks' annual reports; The Banker; BankScope; Bloomberg; RBA

Table 4: Banks' Half-yearly Profit Results(a)
Five largest banks, consolidated
2004
$b		 2005
$b		 Growth
Per cent
Income
Net interest income 12.0 12.8 7.3
Net income from wealth management 2.5 3.0 17.1
Other non-interest income(b) 6.6 7.8 18.9
Expenses
Operating expenses(b) 10.6 11.7 10.6
Bad and doubtful debts 1.0 1.0 −0.1
Goodwill amortisation 0.4 0.5 5.7
Profit(c)
Net profit before tax and revaluations 9.1 10.5 15.4
Net profit before tax 9.1 11.0 21.1
Net profit after tax 6.6 8.1 23.1

(a) The six months to March 2005 for the ANZ Banking Group, National Australia Bank, St George Bank and Westpac Banking Corporation, and the six months to June 2005 for the Commonwealth Bank of Australia.
(b) Includes Commonwealth Bank of Australia's ‘Which New Bank’ restructuring costs; National Australia Bank's foreign currency options trading losses, sale of stakes in AMP and St George Bank, the disposal of two Irish banks and reversal of HomeSide provisions.
(c) Before outside equity interests.

Sources: Banks' annual and interim reports

Table 5: Bank Business Lending by Loan Size
As at June 2005
Loan size Level
$b		 Share of total
Per cent		 Growth
Year to June, per cent
< 100k 24.2 6 −2
100k – 500k 65.5 17 9
500k – 2m 66.9 18 16
> 2m 219.5 58 12
Total 376.2 100 11
Source: APRA
Table 6: Banks' Australian Commercial Property Exposures
Per cent, as at March 2005
Type of exposure Growth
Year to
March 2005		 Share of total
commercial lending		 Impaired assets
Share of commercial
property exposures
Office 9 9 0.1
Retail 20 7 0.0
Industrial 24 4 0.1
Residential 22 11 0.3
Tourism and leisure 17 1 0.1
Other 34 4 0.3
Total 19 36 0.1
Source: APRA
Table 7: Australian Banks' Foreign Exposures
As at June 2005
Country Total of which:
Level
$b		 Share
Per cent		 Cross-
border
$b		 Local
$b
New Zealand 165.1 47.8 11.1 154.0
United Kingdom 83.2 24.1 13.7 69.5
United States 30.7 8.9 15.5 15.2
Other developed countries 43.8 12.7 41.6 2.2
Developing countries 12.2 3.5 6.1 6.0
Offshore centres(a) 10.3 3.0 6.8 3.5
Other 0.3 0.1 0.2 0.1
Total 345.6 100.0 95.1 250.6
Memo: per cent of total assets 27.1 7.5 19.6

(a) Includes Hong Kong and Singapore

Source: APRA

Table 8: Traded Market Risk(a)
Per cent of shareholders' funds, four largest banks
2004 2005
Half-yearly average 
Interest rate 0.03 0.03
Foreign exchange 0.02 0.01
Other(b) 0.02 0.01
Diversification benefit −0.02 −0.01
Total 0.06 0.04

(a) Value-at-risk is calculated using a 99 per cent confidence interval and one-day holding period.
(b) Other market risks include commodity, equity, prepayment, volatility and credit spread risk.

Sources: Banks' annual and interim reports

Table 9: Long-term Ratings of Australian Banks
As at 22 September 2005
Standard & Poor's Moody's Fitch
Adelaide Bank BBB+ Baa1 na
AMP Bank A− A3 na
ANZ Banking Group AA− Aa3 AA−
Arab Bank Australia na Baa2 BBB+
Bank of Queensland BBB+ Baa3 BBB
BankWest A+ A1 na
Bendigo Bank BBB+ na BBB+
Commonwealth Bank of Australia AA− Aa3 AA
HSBC Bank Australia AA− A1 na
ING Bank (Australia) AA Aa2 na
Macquarie Bank A A2 A+
National Australia Bank AA− Aa3 AA
St George Bank A A2 A+
Suncorp-Metway A A2 A
Westpac Banking Corporation AA− Aa3 AA−
Sources: Fitch; Moody's; Standard & Poor's
Table 10: Long-term Ratings of Selected General Insurers
As at 22 September 2005
Insurance Australia AA
Vero Insurance (Promina) A+
QBE Insurance Australia A+
Suncorp Metway Insurance A
Source: Standard & Poor's
Table 11: Assets under Management
Consolidated, as at June
1990 2005
Level
$b		 Share of total
Per cent		 Level
$b		 Share of total
Per cent
Superannuation funds 75.4 37.5 496.3 54.2
Life insurers 81.2 40.3 188.9 20.7
Other managed funds 44.7 22.2 230.0 25.1
Total 201.3 100.0 915.2 100.0
Sources: ABS; APRA
Table 12: Owner-occupied Residential Mortgage Risk Weights
Per cent
LVR Loans with Mortgage Insurance Loans without Mortgage Insurance
Standard Non-standard(a) Standard Non-standard(a)
Current Proposed Current Proposed Current Proposed Current Proposed
<60 50 35 50 35 50 35 50 50
60-80 50 35 50 50 50 35 100 75
80–90 50 35 50 75 100 50 100 100
90–100 50 50 50 75 100 75 100 100
>100 50 75 50 100 100 100 100 100

(a) Non-standard loans are mostly low-doc loans.

Source: APRA