Banks at Risk of Bad-Debt Blowout as Aussie Steelmaker Collapses

  • Commonwealth Bank, ANZ facing losses on loans to steelmaker
  • Arrium collapse shows threat to banks from commodities rout

Pedestrians walk past a Commonwealth Bank of Australia branch in Sydney.

Photographer: Sergio Dionisio/Bloomberg

Commonwealth Bank of Australia and its competitors are staring at a potential blowout in bad-debt expenses as they try to claw back a combined A$1 billion ($753 million) of loans to steel and iron ore supplier Arrium Ltd., underscoring the looming threat to lenders from the commodities bust.

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