Australian Financial Providers Tipped to Take On Another Year of Debt

Official unemployment figures are curently at 5.70%. If the Australian unemployment rate remains on the rise, banks are said to face another year of growing debt as bankruptcies and debt mediation incidents grow.

Cameron Clyne, Chief executive of NAB stated that while the impact of economic strain was lesser than that of other countries, banks and lenders in Australia are only now facing impairment charges – lending out to consumers and businesses who end up becoming a liability rather than an asset. 

“Consumer default is a by-product of unemployment” stated Mr.Clyne. Consumer default may drive banks to new lows if profit margins continue to drop.

Banks are at the low-end scale of consumer default on a world scale. The Federal Treasury estimates that the 8.95% of working age Australians will be jobless come June 2010.

Some banks are yet to even notice a significant different – NAB stated that 90% of their mortgage portfolio are still making consistent repayments, and are “more confident that we will be able to work with our customers to improve outcomes in relation to the last down cycle“ 

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