Fitch Ratings has affirmed the ratings of Australia's four major banking groups:

  • Australia and New Zealand Banking Group Limited (ANZ),
  • Commonwealth Bank of Australia (CBA),
  • National Australia Bank Limited (NAB)
  • Westpac Banking Corporation (WBC).

The Outlook on each bank's Long-Term Issuer Default Rating (IDR) is Stable.

Some of the aspects mentioned in Fitch's report ... good, bad & ugly:

  • The Long- and Short-Term IDRs and Stable Outlook on all four banks are driven by their Viability Ratings and reflect their dominant franchises in Australia and New Zealand as well as robust regulatory frameworks.
  • Stable, transparent and traditional business models have proven effective in generating consistently strong profitability, while the banks maintained a conservative risk appetite relative to many international peers.
  • High exposure to a heavily indebted household sector and increased focus on conduct related issues from authorities offset some of these strengths.
  • Household debt reached 188% of disposable income at end-September 2017. Combined with low wage growth and high underemployment, this leaves households increasingly susceptible to higher interest rates and deteriorating labour market conditions.

Its a long, long report - those are just a few snippets ... but there is nothing in there that isn't on the radar though.

The ugly:

  • Household debt
  • low wage growth
  • high underemployment

Yep.