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Financials

Austrian central bank says must monitor property loans closely

VIENNA, Dec 11 (Reuters) - Systemic risks in the Austrian financial sector related to the property market remain low but supervisors must monitor the situation closely as by some measures mortgage lending is becoming riskier, the country’s central bank said on Monday.

“Real estate-induced systemic risks remain subdued in Austria, but close supervisory monitoring is warranted in light of the fact that a rising share of new housing loans to households shows relatively high loan-to-value, debt service-to-income and debt-to-income ratios,” the Austrian National Bank said as it issued its half-yearly Financial Stability Report.

Banks should use the window of opportunity afforded by the “currently benign market environment” to continue structural reforms aimed at improving their efficiency and profitability while avoiding taking excessive risk, particularly in mortgage lending, it added.

Reporting by Francois Murphy, editing by Kirsti Knolle

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