G&C Mutual Bank Ltd.

Outstanding level of capitalization that supports capacity to absorb losses Low net charge-offs and non-performing loans Small market share without a particular niche reflects its weak franchise strength Exposure to heightened competitive pressures for funding The outlook on G&C Mutual Bank Ltd. (G&C) reflects S&P Global Ratings' view that economic risks facing financial institutions operating in Australia are potentially increasing from strong growth in private sector debt and residential property prices in the past four years. Our base case scenario is that the expansion in private sector debt and property prices will moderate and remain at relatively low levels in the next two years. Nevertheless, in our downside scenario, we consider that there is a one-in-three chance that the strong

...The outlook on G&C Mutual Bank Ltd. (G&C) reflects S&P Global Ratings' view that economic risks facing financial institutions operating in Australia are potentially increasing from strong growth in private sector debt and residential property prices in the past four years. Our base case scenario is that the expansion in private sector debt and property prices will moderate and remain at relatively low levels in the next two years. Nevertheless, in our downside scenario, we consider that there is a one-in-three chance that the strong growth will continue. This would heighten the risk of a sharp correction in property prices, thereby increasing the risk of a significant rise in credit losses incurred by all the financial institutions operating in Australia....

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