Most of the bank’s profits were driven by a strong rise in lending last year when the national housing market was charging ahead, underpinned by super low interest rates.
In a note to the ASX, chief executive Matt Comyn warned of difficult times ahead for many Australian households because of rising inflation and higher costs of living.
“We have seen a rapid increase in the (RBA) cash rate which is negatively impacting consumer confidence,” Comyn said.
He expected consumer demand “to moderate” as cost of living pressures increase.
“It is a challenging time, but we remain optimistic that a path can be found to navigate through these economic conditions.”
Comyn said, against many measures, Aussie homes and businesses remained in a relatively “strong position”.
As the property market cools, the bank’s analysts believe a correction of around 15 per cent is on the way, with perhaps an even harder fall in Sydney and Melbourne.
At 11:30 AEST, the bank’s share price was down about one per cent.
As the Reserve Bank continues to lift interest rates, more households are being pushed into mortgage stress.
Mortgage stress is the total of household income and expenditure.
If there’s more money going out than coming in, they’re classified as stressed.
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