Financial Stability Snapshot 12 October 2018
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Global Economic outlook
Improving global economy, but risks to growth.
Low global interest rates, high asset prices and low volatility pose risks.
China debt is high but stabilising. 260% non-financial debt to GDP.
With a share of income of 190%, household debt is high.
Demand and supply have declined. Investor credit decreased sharply to 1%, owner-occupier credit only slightly to 7%.
Riskier lending moderating
The share of total home loans with more than 90% loan to valuation is 6%, interest-only loans make up 16%.
Commercial property risks
Prices are up, yields are low.
Non-performing loans are rising but at 0.9% low.
Banks well capitalised
The Common Equity Tier 1 (CET1) ratio is 10.5%, but banks are facing business risks.