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18 April 2024

Home / Bank Capital

Bank Capital

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What's next for bank hybrids?

APRA is investigating bank hybrids to better secure bank capital and the broader financial system. The problem in Australia is most hybrids are held by 'retail' investors who may not understand the risks. 

Market turbulence shows strength of Australian bank T2 bonds

Hybrid securities have gained popularity, though that faith was shaken when Credit Suisse bonds were wiped out. What's overlooked is that it strengthens the case for owning superior quality Australian bank T2 bonds.

Is the best value for Australian credit not in Australia?

Most Australian investors chasing the extra yield on major bank hybrids, or T1 securities, limit their activity to the domestic market, but there is a disconnect in pricing creating better opportunities offshore.

Capital changes strengthen bank hybrid investments

With stronger capital positions, improved brand equity and the potential to benefit from a robust post-pandemic recovery, the global banking sector is presenting significant opportunities for investors.

How long will the bad inflation news last?

The answer to whether the US inflation increase will prove temporary or permanent depends on the rates of growth of the quantity of money. It needs to be brought down to about 0.3% a month, and that's a problem.

The case for Australia to restore its gold reserves

It’s been 21 years since the RBA sold the majority of Australia’s national gold reserves. The decision cost the nation AUD5 billion. Is it time to rebuild gold reserves with the opportunity cost now much lower?

Bank limitations create opportunities for non-bank lenders

Changes to banking regulations have led to higher interest rates on bank loans for SMEs and personal loans, pushing borrowers towards the rapidly growing new segment of non-bank lending for faster and better service.

Bank collapse wakes up hybrids, but is subordinated better?

Investors received a wake-up call to the potential risks of hybrid and subordinated securities following the collapse of Banco Popular Espanol, and the price falls in Australian hybrids shows the market took notice.

What happened to our gold-plated bank capital position?

The implications for hybrids, bank margins and bank fees from the increase in the risk-weighting of residential mortgages and learning our banks are not top quartile among the capital levels of global banks.

Bank capital in a post-FSI world

The FSI's final report is expected this month. From a bank capital perspective it could go one of a few ways: changes to mortgage risk-weightings, new capital rules for the big banks, a combination of both, or no change at all.

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