COMMONWEALTH Bank of Australia and Westpac might experience an increase in bad debt provisions in the short to medium term, but any losses should be easily managed, ratings agency Standard & Poor's says.
"Although there might be an increase in provisions in the second half of fiscal 2008 due to a softening in the credit cycle, we believe that credit losses for both banks will remain in line with our expectations,'' S&P said.
'Standard & Poor's expects that both banks will continue to rigorously monitor and manage their credit exposures, funding, and liquidity in the face of challenging conditions in global financial markets, and maintain appropriate capitalisation.''
S&P has reiterated its AA long term and A-1-plus short term ratings on CBA and Westpac, with stable outlooks, after reviewing their likely credit losses in the short to medium term.
