Australian shadow banks to benefit more than major lenders from housing boom

Liberty

14/07/2021 07:26

** Citi says current rising housing prices in Australia amid
40-year low mortgage rates will likely benefit non-banking
financial institutions (NBFIs) more than traditional lenders
    ** Mortgage credit growth and household income growth have
not been as strong as house prices
    ** NBFI's to see ~7% revenue growth due to widening demand,
less margin pressure and a drop in funding costs 
    ** Narrow focus of Australia's main banks  CBA.AX ,
 WBC.AX ,  NAB.AX ,  ANZ.AX ,  MQG.AX  on owner occupiers and
slowed approval time will keep their revenue growth around ~5% 
    ** NBFIs price-to-earnings ratio are lower then major
lenders and regional banks  BOQ.AX ,  BEN.AX  and are not
reflecting their mortgage revenue growth prospects, Citi adds
    ** Mortgage brokers Australian Finance Group  AFG.AX   and
Liberty Financial Group  LFG.AX  are our preferred players in
the current cycle - Citi
    ** Commonwealth Bank of Australia best placed major bank but
its share price already reflects the mortgage market upside, it
adds 

 (Reporting by Anushka Trivedi in Bengaluru)
 ((Anushka.Trivedi@thomsonreuters.com; +918061823241;))