The year in review - and what awaits in 2019?

Alistair Wood
Dec 4, 2018
3 min read

Welcome to the fourth edition of our Newsletter and a wrap up of 2018. We trust that your year has been successful and extend our best wishes for Christmas and the New Year. We are pleased to report that our activity levels have further increased and hope that we can assist you in 2019.

At the end of 2017 Malcolm Turnbull announced the Financial Services Royal Commission. We now have Scott Morrison leading an increasingly fragile Coalition government, and the Hayne led enquiry has dominated the Financial headlines for much of the year. The enquiry has received over 10,000 submissions, with over 60% relating to the Banking Industry. The major players have all received negative press and been forced to reveal shortcomings within their organisational practices. Whilst the enquiry has forced the Banks to take appropriate remedial action it has had the consequent effect of bringing more scrutiny, caution and conservatism to the Big 4 lenders. Although many of the headlines relate to Retail Banking issues, the sentiment has impacted upon the Corporate Lending space.

Whilst the intended purpose of the Commission is to bring the Banks to account and publicly ensure that they are seen to do the ‘right’ thing, the unintended consequence has been a pull back in terms of risk appetite and left many previously ‘bankable’ deals looking for a home.

The irony is that there are a plethora of non-Bank sources now available – with many of them being financed by the very Banks who are declining the original request.

Recent BRW Advisory activity

Commercial investment property finance.
Transactional banking tenders for Medium to Large Corporates.
Commercial and hospitality property management.
Trade finance new facility
Asset Finance propositions
Ongoing Facility monitoring

Current market trends

Banks – Bank margins do not seem to be increasing, and underlying rates don’t seem to have the same upward pressure that they had a few months ago. Whenever the next change comes it will almost certainly be an increase but not drastically.

Property lending– No material change. It is a difficult market, but lowly geared proposals are still attracting competition and fine margins.

Development funding remains difficult with all major Banks unless you have a strong track record and are utilising builders who can demonstrate their own capability to complete a project. The range of views on where the market is and where it is headed is extensive. Our take, based on the weight of opinion is that there is still downward pressure on Residential and the start of worsening sentiment in the Commercial space.

Benefits of using BRW

Access to experienced industry professionals.
Free assessment and objective guidance on your banking requirements.
Strong relationships with Tier 1 and Tier 2 finance providers to the Corporate market.
Clear focus on the best deal for the client.
Competitive fees weighted towards achievement of a successful outcome.
Support through the full process ensuring that Bank conditions are achieved quickly and efficiently.
Ability to provide an ongoing monitoring of your loan/s to ensure covenant compliance is maintained.