Last I checked bad debts and arrears at the major Australian banks were were at a low of 0.08% of loans. Does anyone for one second believe this to be true. 40% of Australian households have a mortgage and 75% are variable. Rates have come up from 2.0% to 6.0%.
There's also commercial loans which are in distress. So take the $65m that ASX listed CAN owes NAB. CAN has a market capitalisation of around $18m so the loan is clearly in distress and worth much less than $65m.
Question to the NAB CEO Is as follows "What valuation have you got the CAN loan on your books?" If the answer is close to $65m then we know that the trillions of dollars of loans sitting on the major banks' books are probably worth a lot less and will one day make the US housing crisis look like a walk in the park.
NAB Price at posting:
$37.70 Sentiment: None Disclosure: Not Held
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