Macquarie Group may need to consider pulling back its expansion moves into mortgages to prevent being slugged with additional capital charges.
The bank’s lending to property investors is rapidly growing eight times faster than the rate the Australian Prudential Regulation Authority (APRA) considers prudent, The Sydney Morning Herald reported.
APRA said banks whose investor loans were increasing by more than 10% are at risk of intensified regulator scrutiny and worse, higher capital charges. The regulator said this benchmark “was not a hard limit but rather a key risk indicator for its supervisors”.
"APRA's announcement would be a potential concern for Macquarie as a result of their heavy skew to investor housing but APRA did mention it's not a hard limit," said Omkar Joshi, an analyst at Watermark Funds Management.
In May, Macquarie chief executive Nick Moore said the bank aimed to expand its mortgage book to $25bn but did not mention a deadline.
The SMH said the bank declined to comment about whether APRA's action would impact on its strategy.
Collections: Mortgage News
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