Major slams credit criteria accusations

by 06 Jan 2014

CBA has hit back at accusations that banks are constraining growth by restricting credit to small businesses.

With Goldman Sachs economists describing business borrowing in Australia as “anaemic” and analysts accusing banks of cherry-picking clients following lower risk tolerance post-GFC, CBA’s Grahame Peterson has defended the bank’s position.

“We're not capital constrained, we're not constrained by credit policy; we've been very consistent with our clients and our approval rates are relatively similar (since pre-GFC) and we're very keen to do business,” the bank’s head of business and private banking told The Australian.

“The reality is if you look at any of the data out there, pre-GFC roughly two-thirds of business enterprises borrowed or had some form of debt, and now post-GFC the number is around 30 per cent."

The business banking market remains intensely competitive, said Petersen.

Where would the logic be for any enterprise to say: 'No I don't want to do business?'”

Petersen said confidence had improved, but businesses had not yet started borrowing more.

COMMENTS

  • by Competition 6/01/2014 10:20:59 AM

    Goldman & others have it 'spot on' (exception of ANZ).

    No doubt the reason it caused such an outcry with most of the major banks.

  • by John C 6/01/2014 9:18:43 PM

    Could not agree more. However the Government needs to step in and provide a form of Business Guarantee (as does the Chinese Government for their Small Businesses) otherwise Business in Australia as we know will all but dissappear. That is why some many Chinese business flourish as they have the financial underwriting to grow and expand their businesses. Not here in Australia. The politicians have got it wrong in this country by a long shot! There is NO incentives in Australia for Investors, and the Australian way of doing business needs to change radically and very quickly or otherwise within 15-20 years we will no longer be known as Australia but as Chinraila. Scary thought!