The Banking System Outlook survey found that the sector is "stable and lenders continue to be well protected against a deterioration in the credit environment", and that credit conditions should "remain favourable as a result of low interest rates, which aid mortgage repayment affordability."
Competition from new entrants who are able to re-price the market downwards is not considered to be a threat to the sector any more as new entrants are now being forced to price at more sustainable levels. The report said that the industry is beginning to adapt to working on lower profit margins.
However, the report found that there are clouds on the horizon, such as potential economic slowdown. Other pitfalls include the threat of remortgaging away from the sector and the loss of market share.
