The RBA released its September Financial Stability Review today, showing that the GFC was continuing to impact on the local mortgage business.
The aggregate non-performing loan ratio for banks was 0.69% as at June 2009, compared to 0.49% a year earlier.
The report stated that credit union/building society arrears rates (0.15%) were lower than those of banks (0.35%) and that in spite of lower interest rates easing pressure on borrowers, higher unemployment presented a serious risk to lender portfolios.
Smaller banks were having to cut margins as business converged around the big four.
Stephen Fergusson, senior manager of risk and compliance at Homeloans Limited, told Broker news that the non-bank sector was feeling similar heat.
Referring to mergers and collapses in the non-bank sector he said the market had "cleaned itself out a bit".
"There's been a lot of movement back to the [big four] banks. In our mortgage management sphere, it remains very competitive. We're still in a state of flux within the alternative lenders," he added.