According to Banking Day:
"Australian Prudential Regulation Authority chairman John Laker named commercial property lending as the focus of the regulator’s current credit quality concerns.
In a speech yesterday to the AB+F Leaders Lecture Lunch in Sydney, Laker highlighted commercial property exposures as the main source of bank asset impairments. He described the problem as “an echo of the 1990s recession”.
His comments came as Bank of Queensland an increase of a $97 million in impaired commercial assets (see item above). Other institutions known to have had problems in their commercial property portfolios in recent times include Investec, Suncorp and the Australian arm of Lloyds.
Reserve Bank of Australia deputy governor Ric Battelino said in October that foreign banks and small banks were over-exposed to commercial property lending. Laker may have been referring to the same groups yesterday when he said that commercial property lending had been an avenue for rapid asset growth by ‘new’ lenders. The lead-up to the crisis had seen lenders finance riskier development and “obviously, some fingers got quite burnt in this area”."
