Can the Resources industry still bank on support from Big 4?

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