Australian banks rein in loans to property investors amid stern warnings

Sydney

AUSTRALIAN banks are reining in their most profitable business after increasingly stern warnings from regulators that tighter mortgage lending standards may be needed to prevent a housing bubble in Sydney from destabilising the financial system.

The country's four major lenders, Commonwealth Bank of Australia (CBA), Westpac Banking Corp, ANZ Banking Group Ltd and National Australia Bank have all begun to tighten lending to investors in recent weeks.

The measures include stricter criteria to approve investor loans, pulling down interest rate discounts and raising deposits on investor loans to up to 20 per cent, from…