Slackened Australia bank funding and capital improvements up ahead: Fitch

Nuanced funding improvements are also seen.

It has been reported that Australian bank funding and liquidity improvements are likely to continue, albeit at a reduced pace.

According to a release from Fitch Ratings, this development has been stated in Fitch’s APAC Chart of the Month report.

However, the release noted that a sharp increase in demand for credit may pressure the ability of banks to fund the growth without potentially reversing some of the recent gains.

Here’s more from Fitch Ratings:

Banks have largely addressed the capital and liquidity coverage ratio requirements of Basel III following significant strengthening post-2008.

An increase in deposit gathering and lengthening of wholesale funding duration drove stable funding (customer deposits + long-term wholesale funding) to 75% of total funding at end-March 2014, up from 62% in 2008.

Further funding improvements are likely to be more nuanced, with a greater emphasis on longer-term funding rather than deposits, while any additional capital requirements are likely to be achieved through retained earnings.