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Moody's warning on Aust banks

AAP logoAAP 18/08/2016

Australia's banks have been put on a negative outlook by ratings agency Moody's, which says the sluggish national economy is pressuring their profits and leaving them exposed to external economic shocks.

Moody's has changed its outlook for the Australian banking system from stable to negative, saying it expects "a more challenging operating environment for banks in Australia for the remainder of 2016 and beyond".

Low wages growth and low interest rates were pressuring profits, while high real estate prices were driving household debt up and leaving the economy "increasingly vulnerable", the agency said, and problem loans were also expected to increase in the resource sector due to the mining downturn.

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