Borrowers39; market in Australian home mortgages
About 300 bln in fixedterm loans to go variable this year
Retail deposit rates rising as banks compete for savings

SYDNEY, March 28 Reuters Australia39;s biggest lenders said on Tuesday the domestic financial sector was unlikely to be caught in turmoil engulfing rivals in the US and Europe, but warned that raging competition to sell home loans and attract deposits was hitting margins.

Regulators and bankers insist the countrys banks, bolstered by postglobal financial crisis reforms are well placed to handle the solvency and liquidity shocks that rocked lenders overseas like Silicon Valley Bank in the U.S.

A stress test announced by an Australian prudential regulator on Tuesday found bank capital would stay above minimum levels in a doomsday scenario where unemployment rose to 11, house prices fell 43 and cyber attacks hit the major banks.

But what has helped insulate the banks from trouble overseas reliance on mortgages and retail deposits now threatens to hurt profitability, with competition for loans and deposits intensifying, the chiefs of Australias top and thirdlargest lenders and other bank executives told a summit in Sydney.

It39;s the most competitive market for mortgages that I39;ve seen in my career, Westpac Chief Executive Peter King, who started at the bank in 1994, said at the Australian Financial Review Banking Summit.

Roughly A300 billion 200 billion worth of fixedrate loans expire this year and…