Sub-prime collapse hits Aussie banks for $850 million
Thursday January 10, 2008
Despite constant assurances from Australia's leading banks that they aren't exposed to the sub-prime mortgage disaster in the U.S, the Australian banks look set to lose $850 million.
The Commonwealth bank and the National Australia bank have both "invested" $300 million, the ANZ $150 and the Westpac $100 million in an attempt to bail out US mortgage group Countrywide Financial, which looks ready to close its doors.
The Aussie banks aren't the only ones to have lost money in this exercise with up to 40 foreign banks lending Countrywide money to stay afloat.
Little wonder that home loan interest rates are on the rise ahead of any formal announcement from the Reserve Bank of Australia.