By Eric Johnston
Australia’s four biggest banks and investment bank Macquarie Group have emerged as some of the heaviest users of government guaranteed debt among their global rivals, tapping markets for more than US$82 billion ($A94 billion) since October last year.
The figures come as the Senate economics committee is today scheduled to hand down findings of its review into the Australian program giving banks access to a AAA-credit rating as pressure builds on the Rudd Government to change the pricing of the program, which has so far worked against smaller banks.
The five Australian banks each appear in the top 20 of issuers of government guaranteed bonds around the world
The biggest Australian user of government guaranteed debt among global rivals is tenth-placed Westpac with US$21.7 billion issued since October, according to figures compiled by Dealogic.
Commonwealth Bank comes in at number 13 with nearly US$20 billion on issue, followed by National Australia Bank at 15 and ANZ at 16th spot.
Macquarie Group, which has a credit rating one notch below the big banks, makes it as the 20th biggest user, issuing nearly US$11.6 billion in government guaranteed debt since October.
Coming in at top spot is British lender Lloyds which has issued US$59.4 billion in government guaranteed bonds. US lender Citigroup has issued more than US$51.6 billion and Britain’s RBS has more than US$45 billion on issue.
US regulators recently detailed plans to either remove or water down its government support scheme from next month. Australia is one of the few major economies that has not yet placed a date on the expiry of its funding program.
For their part bankers say Australian bank funding figures run at a higher rate to global rivals, given business customers are more reliant on banks for their fund-raising activities compared to European or US markets where corporate bond markets are deeper.
Separately, brokerage Citigroup yesterday said large Australian banks should be able to deliver a return on equity of the pre-financial crisis levels of about 20 per cent within the next two years.
Earnings across banks should be boosted by the rate of bad and doubtful debts subsiding by 2012, interest margins recovering and tight cost control, Citigroup analyst Craig Williams said yesterday.