<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Australia's major </span><a href="https://www.9news.com.au/banks" rel="" target="" title="banks"><span>banks</span></a><span> are squirrelling away more cash in anticipation of a rise in the amount of people and businesses unable to repay their loans, in yet another sign of difficult economic times ahead.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Just hours before the Reserve Bank of Australia (RBA) is predicted to lift interest rates, Westpac has announced a half-yearly profit of $3.5 billion.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>That's up 1 per cent on its results from the same period last financial year.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/interest-rates-warning-reserve-bank/495170b6-0d69-4ae6-b881-e52775617c32" rel="" target="" title="Experts say hiking interest rates today would be 'a mistake'"><strong><span>Experts say hiking interest rates today would be 'a mistake'</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>At the same time, the bank said it was increasing its so-called "bad debt buffer" to $5.2 billion, adding a $282 million "overlay" against potential losses from borrowers in energy-intensive sectors.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>This money is designed to cushion the bank against borrowers who default on their loan repayments.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The war in the Middle East is presenting challenges for some customers and the economic impact of the conflict will continue through the year," Chief Executive Officer Anthony Miller said.</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/national/westpac-nab-anz-increase-bad-debt-buffers-in-sign-of-difficult-economic-times-rba-interest-rate-hike/e3d9b065-5cd2-41be-89c8-6187b3f97980" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The disruption to energy supply chains has driven a rise in prices and we're seeing this flow through to businesses and households, with some sectors more affected than others."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The bank's move follows that of the National Australia Bank (NAB), which announced late last month that it was sharply increasing its provisions for bad debts, setting aside an additional $300 million.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>ANZ is also setting aside an addition $175 million in provisions against bad debt.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/single-interest-rate-hike-puts-100000-mortgage-holders-at-default-risk/4ea8197c-71b7-442e-b5d9-96fc40d9ae4c" rel="" target="" title="Default risk looms for 100,000 mortgage holders if rates rise"><strong><span>Default risk looms for 100,000 mortgage holders if rates rise</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The shift is a key sign that Australia's major banks are moving to sure up their balance sheets against tough economic times, as surging fuel prices and multiple interest rate hikes act as a double-whammy hitting everyone from families with mortgages through to small businesses.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Those at the mercy of surging fuel prices, such as truckies, are expected to be hardest hit.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>All the major banks are predicting the RBA will announce an interest rate hike of 0.25 percentage points to 4.35 per cent, completing the undoing of last year's tripe rate cut.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>An interest rate hike this week would </span><a href="https://www.9news.com.au/national/single-interest-rate-hike-puts-100000-mortgage-holders-at-default-risk/4ea8197c-71b7-442e-b5d9-96fc40d9ae4c" rel="" target="" title="put 100,000 mortgage holders on the brink of defaulting"><span>put 100,000 mortgage holders on the brink of defaulting</span></a><span>, research shows.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>A survey by comparison site Finder shows one in 10 mortgage holders (297,000 mortgagors) would be unable to repay their home loan if they were hit by one or two more increases.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In more bleak news for borrowers, Westpac economists have forecast further interest rate hikes in June and August.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Business confidence is </span><a href="https://www.9news.com.au/national/interest-rates-warning-reserve-bank/495170b6-0d69-4ae6-b881-e52775617c32" rel="" target="" title="at a record low"><span>at a record low</span></a><span>, last month falling below the level seen at the onset of the COVID-19 pandemic in 2020.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 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