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ISCOVER
Staff Reporter
Australia’s banks are likely to see a $1 billion surge in bad debts as a result of the recent flooding across Queensland.
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New research from UBS found the disaster is likely to trigger a $200 million jump in bad-debt charges for the big four banks, while regional lenders such as Bank of Queensland and Suncorp also face big losses.
UBS analyst Jonathan Mott also warned that banks will also be left with mortgages on properties that no longer exist.
Mr Mott said UBS’ early estimate is around $1 billion of losses to the banking sector, however that figures is likely “to move in coming months”.
Initial estimates indicate that approximately 28,000 houses will need to be completely re-built, while another 5,000 were partially flooded.
As a result of the floods, UBS is currently in the process of downgrading its 2011 earnings estimates for the big four banks between 1.1 per cent at Westpac and 2 per cent at NAB.
