Australian banks will weather the financial damage from natural disasters that struck the nation this year and face a period of slower growth as borrowers show restraint, the central bank said in a twice-yearly report.
While the floods and cyclone in Queensland state Ã¢â‚¬Å“could impinge on banksÃ¢â‚¬â„¢ asset quality to some extent,Ã¢â‚¬Â the impact should be limited given the affected regions account for a small share of total lending, the Reserve Bank of Australia said in its financial stability review released today in Sydney.
Ã¢â‚¬Å“BanksÃ¢â‚¬â„¢ domestic growth opportunities are likely to be more limited in the futureÃ¢â‚¬Â as the expansion prior to the global financial crisis was partly fueled by financial deregulation and a shift to low inflation, the RBA said. Ã¢â‚¬Å“It appears unlikely that credit growth will return to very high rates that were sustained in the pre-crisis period.Ã¢â‚¬Â
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