Declining support for Natural Resources by Aussie banks over the last decade may require new capital funding solutions to support energy transition.

Key Insights

• Australian bank support was crucial in the last Resources boom (mid 2015 demand peak) when exposure more than doubled to A$65bn
• This has now declined to levels not seen since 2013, in contrast to significant overall balance sheet growth and rising value of Resources exports
• As financial capital available from banks has waned, so has specialist human capital required to support Resources lending activity
• Multiple factors have contributed, including reduced ESG and reputational risk appetite
• Australian banks appear less capable of meeting equivalent future demand for debt capital, which will require the industry to target new sources of capital and a wider range of markets