Higher interest rates are taking their toll on Australian borrowers, the Commonwealth Bank’s chief executive Ralph Norris has warned.
In announcing its three month results this week, Mr Norris said the lender had experienced a spike in home loan arrears, particularly among first home buyers.
The number of CBA home loans that were at least 90 days past due increased to $2.9 billion from $2.6 billion in the previous quarter.
Mr Norris attributed the increase in arrears to both rising rates and the natural disasters that occurred earlier in the year.
“It has been impacted by the weather events that we have seen in Queensland and the impact of the Christchurch earthquake on our New Zealand operations and the fact that we did have significant growth in our mortgage book in 2008 and we’ve obviously got the seasoning of that particular vintage of loans,” he said.
But despite the recent uptick in arrears, Mr Norris remained unconcerned and instead said he was hoping to post a record full-year result in August.