Bank profitability could be impacted as the Australian Prudential Regulation Authority
warns banks on tougher capital requirements.
According to The Australian Financial Review
bank investors can expect the potential for tougher action from financial regulators as they tighten up on lending.
The AFR reported NAB
has been the leader in investor lending growth recently and the Commonwealth Bank of Australia would be impacted the most by a crackdown on loans with very long terms.
While APRA has not said what action it is taking on investor lending, analysts believe it will slow credit growth and revenue.
Watermark Funds Management investment analyst
Omkar Joshi told AFR the increased pressure from APRA was "negative" for the sector as it would slow future revenue growth in an environment when banks also faced tighter margins.
"You will see revenue growth start to slow down, probably not in the May results of Westpac, ANZ
, but later in the year you will start to see an impact," Mr Joshi told the AFR.
The banks expect APRA to provide feedback to them after March on whether any changes are needed in the second quarter.
Joshi told The AFR there were signs that APRA's actions were having an impact, with new loan approvals falling 0.6 per cent in January, Australian Bureau of Statistics figures showed.