ANZ report shows a slight rise in mortgage delinquency rates, pressuring bad debt provisions.

ANZ Group Holdings revealed on Thursday that the mortgage repayment rate slightly increased in the late June quarter but remained below historical levels, while customer deposits at ANZ Bank also increased. This reflects a trend among other major banks, all grappling with the challenge of rising financial pressure on mortgage customers due to higher interest rates and other living costs.

The bank noted in its latest update that delinquencies are continuing to trend upwards, influenced by rising interest rates, inflation, and adverse weather events in New Zealand.

According to data from E&P Capital, citing Visible Alpha, ANZ Bank allocated a total of 77 million Australian dollars (approximately 49.06 million US dollars) for impairment expenses on future bad debts and doubtful debts for the third and fourth quarters, estimated at 519 million Australian dollars. A significant increase in bad and doubtful debts is expected in the coming quarters, leading to a considerable rise in impairment charges.

E&P Capital analyst Azib Khan said that the credit impairment charges for the third quarter were significantly below expectations, and on this basis, we anticipate a general increase in cash earnings for the 2023 financial year. ANZ Bank's stock price fell 1.1% in early trading, in line with the overall market trend, which also saw a decline.

The bank stated that net loans and advances in ANZ Bank's Australian retail and commercial segment grew by 2% in the third quarter, while customer deposits increased across all segments.

Commonwealth Bank of Australia (OTC:CMWAY) warned that rising living costs would impact profit margins. The profitability of National Australia Bank reflects the decline in profit margins. Against the backdrop of rising living costs, the banking sector's profitability may face challenges.