Impaired loans mounting

Distressed housing loans are continuing to rise, February’s monthly figures from the Reserve Bank show, while across the banking system impaired loans have topped $4 billion as the economy worsens.

Non-performing housing loans rose by $42 million or 2.5% –  a year-on-year increase of $696m to a total $1.72bn.

During February, impaired loans dropped to $244m from $259m in January, while loans past 90 days due, but not impaired, rose to $1.47bn from $1.41bn in January and $908m a year ago.

While the figures might seem high they are well below those of the global financial crisis when the ratio of non-performing housing loans hit a high of 1.2% between 2009-2011. It is now sitting at 0.5%.

Non-performing loans in the commercial property sector have risen quickly – by  more than $90m to a total of $505m. About $294m of that occurred in the past six months. The ratio of non-performing loans is now sitting at 1.17%.

Small and medium businesses have been hit hard by the worsening economy. Their total of non-performing loans rose by $138m or 17% in February to a total of $951m.

In the past six months the total has risen by $386m and over the past 12 months by more than $500,000. The ratio of non-performing loans stands at 1.23%.

All non-performing loans from a total $559.6bn in loans across the banking system rose $236m or 6.2% in February and are up by nearly $2.7bn in the past 12 months. This has brought an increase of four basis points to 0.72% in the non-performing loan ratio.

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