Credit Trends: Focus on Australia

Australia has so far weathered the Covid storm in reasonable shape – though rising case figures driven by the Delta variant have led to numerous snap lockdowns. The country is one of the few Sovereigns rated AAA by the three largest traditional rating agencies, but with a credit consensus rating of aa+, Banks have taken a slightly more cautious view of Australia’s creditworthiness.

This research analyses a number of Australian industries, sectors and companies to demonstrate the Covid effect on national credit quality comparative to global trends. The usual Covid casualties – especially in Travel & Leisure – are apparent, but it is clear that in credit terms, most Australian industries – domestic and international, capital and consumer – are typically outperforming their global peers.

Figure 1 shows cumulative Australian and Global Covid cases since the start of the pandemic.

Figure 1: Covid cases, Australia vs Global

Australian case growth rates began to level off in August 2020; global rates have continued at a consistently faster pace. Tight travel restrictions, strict local lockdowns and a comprehensive vaccination program backed by hard hitting advertising have contributed to a relative success story; although cases are growing again as the more infectious Delta variant spreads.

Australian credit risk trends mirror the Covid case graphs. Figure 2 compares the combined Corporate and Financial credit risk picture for Australia vs. the Global trend [please continue below to access full report].

Figure 2: Corporates and Financials: Australia vs Global

Please complete your details to continue reading this report:

    By clicking the "Submit" button, you are agreeing to the Credit Benchmark Terms of Use and Privacy Policy.

    Download Full Report

    Sovereign Bond Risk Management

    In the current low yield environment, many Sovereign bonds issued by different countries are priced at similar levels. However, this Read more

    Introduction For Credit Portfolio Managers

    Credit Benchmark is a market-led response to three of the most critical issues facing credit risk professionals: 1) The need to Read more

    Sovereign Default Risk In Developing Economies

    This paper examines the use cases for Credit Benchmark’s Consensus Probabilities of Default (Consensus PDs), in the context of more Read more

    Impact Of BCBS Proposals On IRB Banks

    The Basel Committee on Banking Supervision recently published wide-reaching proposals for reducing variation in Credit Risk Weighted Assets, with a Read more

    Follow us on:

    Credit Benchmark brings together internal credit risk views from over 40 leading global financial institutions. The contributions are anonymized, aggregated, and published in the form of consensus ratings and aggregate analytics to provide an independent, real-world perspective of credit risk. Risk and investment professionals at banks, insurance companies, asset managers and other financial firms use the data for insights into the unrated, monitoring and alerting within their portfolios, benchmarking, assessing and analyzing trends, and fulfilling regulatory requirements and capital.