APRA Commercial Property

On Mar. 7, APRA published a review of commercial property lending.

  • Commercial property lending source of significant loss for banks at home and abroad.
  • Response to new market dynamics, indications underwriting standards under pressure.
  • APRA undertook thematic review of commercial property lending over course of 2016.
  • Looked at portfolio controls, underwriting standards of large domestic, foreign banks.
  • Conclusions
  • ADI boards need to be conscious of settings for underwriting standards and controls.
  • All should actively challenge whether expectations of growth in lending are achievable.
  • Ability to challenge hurt by inadequate data, poor monitoring, incomplete bank controls.
  • Expects ADIs to improve capabilities in area, written to individual ADIs with comments.
  • Information gained from thematic review will guide targeted supervisory interactions.

Regulators APRA
Entity Types Bank
Reference Rptg, 03/07/2017
Functions Financial; Operations; Product
Countries Australia
Products Banking; Mortgage
Regions AP
Rule Type Guidance
Rule Date 3/7/2017
Effective Date 3/7/2017
Rule Id 31365
Linked to N/A
Report Issue 3/15/2017
Report Section International

Last substantive update on 03/08/2017