Australian banks will weather the financial damage from natural disasters that struck the nation this year and face a period of slower growth as borrowers show restraint, the central bank said in a twice-yearly report.
While the floods and cyclone in Queensland state “could impinge on banks’ asset quality to some extent,†the impact should be limited given the affected regions account for a small share of total lending, the Reserve Bank of Australia said in its financial stability review released today in Sydney.
“Banks’ domestic growth opportunities are likely to be more limited in the future†as the expansion prior to the global financial crisis was partly fueled by financial deregulation and a shift to low inflation, the RBA said. “It appears unlikely that credit growth will return to very high rates that were sustained in the pre-crisis period.â€
