St George reassures market on CDO exposure
With banking stocks having taken a beating in the wake of provisioning announcements by both the National Australia Bank and ANZ, St George Bank has felt the need to reconfirm to the market that it does not have exposure to collateralised debt obligations (CDOs) or US conduits.
St George issued a statement to the Australian Securities Exchange saying that it continued to have no exposure to US or domestic sub-prime lending or hedge funds.
“Overall credit quality remains excellent, reflecting the high quality of the bank’s residential and business lending portfolios and its prudent credit culture and policies,” the statement said.
It said that St George’s balance sheet was conservative, with a low risk mix of businesses.
“St George is domestically focused and 70 per cent of lending is in Australian home mortgages, which over many decades have proved to have much better credit quality than other types of loans,” the bank said.
“Credit quality in consumer banking remains excellent, with arrears performance solid. Overall credit quality in business banking remains strong.”
The bank said that around 95 per cent of the business banking portfolio was secured with more than 80 per cent secured by property.
AUTHOR
Mike Taylor
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