Village developers likely to be hit by Bendigo Bank and BankWest problems

Two of the most active lenders to Retirement Village developers have been Adelaide Bank (now Bendigo and Adelaide bank) and BankWest. Both are now under pressure in securing funds to lend. Adelaide Bank has reported that it is 90% dependent on retail deposits to fund its activities because the price of using the government guarantee is too high to tap international debt markets. This dramatically restricts how much they have to lend to developers. BankWest has just announced an $825 million write-down on its loans, principally on East Coast property deals. It was recently purchased by the Commonwealth Bank who are now trying to renegotiate the purchase price down by $200 million because of the unexpected $825 million negative result. Villages obviously fall into East Coast property deals.