Jim McKnight talks bad loans

The head of restructuring at UBS says there are clear signs of Australia becoming less strategically relevant to foreign lenders, and retail and traditional media sectors may struggle in the problem loans space.

Australia’s big four banks are facing a challenging time at present. Investor skittishness about banks means that top-rated Australian companies can borrow in financial markets at cheaper rates than the banks themselves. At the same time, Australia’s two-speed economy means we’re seeing problems in a number of sectors – such as tourism, media, retail and property – and many analysts are tipping that the banks’ provisions for bad debts are about to start rising.

In an interview with Business Spectator, Jim McKnight, head of restructuring at UBS, talks about what’s happening in Australia’s banking market at present, and the outlook for the banks’ problem loans.

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