AUD Value of Loans (MoM) (FEB) -4.0% (Actual), 0.0% (Previous)
Private investors to buy homes are not borrowing and the rate of borrowing is rapidly deteriorating. Why? Households are carrying record debt and paying equally high interest.
The ANZ lifted it's rates again before the other banks because it is losing money on this business. See chart.
I don't think the ANZ can afford to throw away 73 million dollars of loans to Kagara. That's like throwing away 292 private customers who bought a home for $250,000 each. We can see that the banks have shifted their lending focus above to support business, with investment loans up 4.4% from a negative -6.8% the month before. Big shift.
Kagara bought Einasleigh for 16 million, so it could probably fetch the same. They have 27 mill coming out of escrow in MUX in 8 weeks and could sell AB for circa 40 mill. Let's say 30. There's 73 mill approx. of relatively liquid assets that could guarantee a loan of equal value. Can you say the same about Aussie homeowners who are indebted to the hill. The outlook for the AUD is not good with a household sector ready to collapse and banks at odds with the RBA. You can see why the RBA is worried and is keeping rates high. The banks will win though and force their hand. The loser will be the AUD.
I am not concerned about KZLs ability to refinance. They are in a much better position than many of the poster's here or the Australian population at large to refinance their situations and have the support of the banks. Can you really say that either the ANZ or RBA are working for households?
KZL Price at posting:
11.5¢ Sentiment: Buy Disclosure: Held
