0431 GMT - Australian and Canadian banks are more vulnerable to rising interest rates than other countries like the U.S., Germany, France and Italy, says Franklin Templeton Institute Investment Strategist Christy Tan in a report. "Canadian and Australian banks are among the most exposed to household debt and are thus more vulnerable," Tan says. Canadian banks have about 54% of their loans in mortgage debt while Australian banks have about 58% of loans in mortgage debt, he notes. The loan-to-value ratio for Australian residential property loans tends to be at 60% to 80%, he says. "So far, the loan-to-value ratio is not alarming. But we believe that a 10-15% fall in property values from the 2022 levels may trigger tighter standards as the loan-to-value ratio rises, especially for the new loans," she adds. (alice.uribe@wsj.com)
(END) Dow Jones Newswires
August 31, 2023 00:31 ET (04:31 GMT)
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