Securitisers Still Breathing, But No Great Shakes

Today the ABS published the revised and updated data on Australian Securitisers. There have been small increases in the quarter, but the trends remain well below pre-GFC levels. During the December quarter 2013, the rise in total assets was due to increases in residential mortgage loans (up $1.8b, 1.8%), other loans (up $1.0b, 7.5%) and cash and deposits (up $0.5b, 12.4%).

SecDec13-1As at 31 December 2013, asset backed securities issued overseas as a proportion of total liabilities decreased to 10.9%, down 0.5 percentage points on the September quarter 2013 percentage of 11.4%. Asset backed securities issued domestically as a proportion of total liabilities declined to 76.9%, down 0.2% percentage points on the September quarter 2013 percentage of 77.1%. Residential and non-residential mortgage assets, which accounted for 82.3% of total assets, were $105.8b as at 31 December 2013, an increase of $1.8b (1.7%) during the quarter.

SecDec13-3We continue to see growth in the residential mortgage sector being power by “Quaker Banking” rather than the securitisation path. I do not expect this to change, because the market for securitisation remains weak and net funding costs through this means are still too high for normal lending, and demand is not sufficiently strong.

Author: Martin North

Martin North is the Principal of Digital Finance Analytics

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