Property finance plan may limit asset write-downs
Fitch Ratings put out a comment on the credit impact of the Australian Business Investment Partnership on Thursday, stating that ABIP will add a degree of systemic stability to both the Australian banking and property sectors, though it may have a limited impact on the latter sector due to the expected credit criteria, which will likely limit assistance to better quality credits.Fitch went on to say that if undertaken carefully, ABIP may alleviate the pressure of unwarranted asset price write downs due to the indiscriminate withdrawal of foreign bank funding lines. Australia's major banks have approximately 50 per cent of their loans in the form of residential mortgages and 10 per cent in commercial property, therefore any measure that inhibits unwarranted property price deterioration is positive. According to Cameron Clyne, managing director of National Australia Bank, in a market briefing on Friday, ABIP may be up and running some time next month.