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Banks to feel more pain: analysts
http://www.abc.net.au/news/stories/2008/07/03/2293917.htm
Submitted by
cij
2 months, 3 days, 20 hours agoFor those who are still highly leveraged up, take note of this article. Brian Johnson, the managing director and banking analyst at JP Morgan Australia, said, "I find it bizarre that Australia would be the only country in the world where there wouldn't be some kind of decline in housing property values." Mr Johnson said Australian banks are actually more vulnerable to the credit crunch than many of their global counterparts because of their high levels of gearing, or loan to capital ratios. "We're talking banks geared 25-30 times, whereas the global peers may be geared 15-20 times... even a moderate loan-loss cycle creates negative earnings," he said.
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