Rising impairments at Bendigo a matter of definition

Banks may be taking their time adjusting to the classification of loans required to meet the requirements of reporting to the market, and APRA, under the new quarterly disclosure regime.

Bendigo and Adelaide Bank on Friday, in a manner similar to Suncorp Metway earlier last week, had to tidy up the reporting of impaired loans in the "pillar 3" disclosure for the March 2009 quarter.

Bendigo said its impaired home loans increased 38 per cent to $26.9 million at over the March 2009 quarter.
 
Impaired "other retail" loans apparently escalated 62 per cent to $130.1 million over the March quarter. However, the inclusion of off-balance sheet loans held in a securitisation entity explains most of the increase.

What is not clear which "other retail" securitised loans are impaired, a category that may include some business loans.

Based on recent disclosures in connection with the insolvency of Great Southern Limited it's presumed Bendigo has not yet classified any loans to investors in the horticulture firm's tax-effective investment schemes as impaired.

Bendigo also reported that past due home loans increased 17 per cent to  $222 million over three months while past due other retail loans more than doubled to $130 million.