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Concern Australian Bank Lending 'exceptionally High' Is Overblow








KKR Joining $5 Billion Surge in Dividend Loans: Australia Credit





In a timely discussion on the fifth anniversary of Lehman's collapse, Mr Schulte highlighted the level of Australian bank lending at a time of steep housing prices, low unemployment and buoyant wages. "...The interest rate structure seems awfully low especially given something else which is really important and that is that the overall level of aggregate debt is exceptionally high in Australia," he said in an interview on Business Spectator. "It is one of the highest in the world, in terms of the loan-to-deposit ratio for the banks being about 120 per cent. "That would be one of the highest in the world. And when you want to slow down credit growth and slow down the aggregates and you want to put a damper on prices, higher interest rates usually are better off than lower interest rates." The claim: Investment strategist Paul Schulte says Australian banks are lending too much money. The verdict: While Mr Schulte's claim that Australia's loan-to-deposit ratio is high checks out, it doesn't take into account the stable nature of Australia's banking system and the fact that our loan-to-deposit ratio is getting better. The claim is overblown. Lending standards Mr Schulte's comment raises concern, especially after the Australian Prudential Regulation Authority said last week: "A sustained low interest rate environment poses further risks to lending standards. <br>For the original version including any supplementary images or video, visit http://www.abc.net.au/news/2013-09-20/schulte-house-bubble/4969228?section=australianetworknews





NMDC to arrange loan for Australian unit





Local banks are striving to maintain lending business in the face of competition from the $2 trillion U.S. high-yield market, where so-called covenant-lite debt is tied to a rate at least 200 basis points lower than the South Pacific nations benchmark. What the banks seem to be doing is to compete more aggressively for what they perceive as limited growth opportunities, said Brian Johnson, a Sydney-based bank analyst with CLSA Ltd. I certainly see credit underwriting standards at the moment being loosened. Quantitative easing has lowered interest rates around the globe and that fuels all sorts of excesses. Ten-Fold Rise Loans that fund payouts are surging as firms borrow cheaply against investments to pay themselves rather than sell assets at a time when merger and acquisition activity is slowing. While high-yield loans borrowed in the U.S. <br>For the original version including any supplementary images or video, visit http://www.businessweek.com/news/2013-09-11/kkr-joining-5-billion-surge-in-dividend-loans-australia-credit





Natixis Said to Consider Hiring for Loan Business in Australia





The lender is looking to hire people in leveraged and project finance-related roles in the country, the people said, asking not to be identified because the details are private. Isaure Gruffaz, a Paris-based spokeswoman for the bank , declined to comment on any hiring plans. Natixis is considering the boost in lending activity as Lloyds Banking Group Plc, Britains biggest mortgage lender, tries to sell its unprofitable Australian business. Westpac Banking Corp. (WBC) , National Australia Bank Ltd. and Macquarie Group Ltd. have made bids for the assets in Australia , two other people familiar with the matter said this week. In January last year, Natixis closed its Australian origination activities in project and acquisitions finance, according to documents filed with the Australian http://www.9news.com/life/community/persona.aspx?U=b31024dcc8714dff8c5fe3949cf27a2c&plckPersonaPage=BlogViewPost&plckUserId=b31024dcc8714dff8c5fe3949cf27a2c&plckPostId=Blog%3ab31024dcc8714dff8c5fe3949cf27a2cPost%3a97825817-a7bc-4201-9794-53268350017e&plckBlogItemsPerPage=5 Securities & Investments Commission. European banks have been forced to scale back offshore business units to preserve balance sheets as liquidity deteriorated during the sovereign debt crisis. Natixiss net profit in Australia almost halved to A$7.7 million in fiscal year 2012, when its main activity in the nation was providing financial guarantees to group companies, according to documents filed with the Australian Securities & Investments Commission. To contact the reporter on this story: Paulina Duran in Sydney at pduran10@bloomberg.net To contact the editor responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net More News: <br>For the original version including any supplementary images or video, visit http://www.bloomberg.com/news/2013-08-15/natixis-said-to-consider-hiring-for-loan-business-in-australia.html









At the current conversion rate ( A1$ = Rs 58), participation in the rights issue would have meant an approximate outgo of Rs 7.25 crore. In a disclosure to the Australian Stock Exchange last week, the mineral resources exploration company said that NMDC had agreed to provide support to enable Legacy Iron to arrange loan facilities with its bankers of up to $3 million. Legacy Irons board dropped the rights issue plan and opted for the borrowing plan after NMDC expressed its unwillingness to participate in the proposed issue. The extended date of the issue expired on August 12. Legacy Iron said that the Board had resolved to cancel the rights offer due to the recent share market volatility. Proceeds from the rights offer were to be used for further exploration activities and development across Legacy Irons iron ore and coal exploration permits as well as other assets in Australia. <br>For the original version including any supplementary images or video, visit http://www.thehindubusinessline.com/companies/nmdc-to-arrange-loan-for-australian-unit/article5049294.ece



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