Company: BBU
Filing Date: 2025-04-10
Form Type: 20-F
Source: 0001628280-25-017216
Chunk: 38

Company: Brookfield Business Partners L.P.
Filing Date: 2025-04-10
Form: 20-F
Item: Item 3
Chunk 38
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 implemented corrective measures to address inflation through a series of interest rate increases since 2022. These increases in interest rates have and may continue to impact our clients’ creditworthiness and therefore impact our operations as well, which resulted in a negative effect on our earnings through higher provisions for credit losses and higher operating costs.

As a provider of residential property-backed loans and one of Australia’s leading mortgage originators, our Australian residential mortgage lender is significantly influenced by changes in the Australian housing market and housing industry. The recent economic slowdown, increases in the general level of interest rates and increases in the rate of inflation have contributed to elevated Australian household indebtedness and could also lead to changes in the demand for housing in the future. Any reduction in home sales activity would impact mortgage origination volumes and persistent inflation would put additional pressure on household budgets, which could contribute to a greater risk of default and credit losses. The Australian housing industry is also highly regulated and any changes to regulatory requirements could increase compliance costs, impact fees and adversely affect the performance of our Australian residential mortgage lending business.

There are risks associated with our non-bank financial services operation.

The primary factors that could adversely affect our non-bank financial services operation and reduce its ability to provide financing services at competitive rates include the sufficiency, availability and cost of sources of financing, including credit facilities, securitization programs and secured and unsecured debt issuances; the performance of loans and leases in our non-bank financial services operation portfolio, which could be materially affected by charge-offs, delinquencies and prepayments; fluctuations in interest rates and currencies; competition for customers from commercial banks, credit unions, vehicle manufacturers and other financing and leasing companies; and changes to financial sector regulation, supervision, enforcement and licensing, in particular as it relates to non-bank financial companies.

There are risks associated with our payment processing services operation.

Our payment processing services operation is impacted by cyber-security risks to our systems or data and other technological risks including software defects, disruptive technologies, undetected errors and development delays that could negatively affect our reputation with cardholders and customers and expose us to penalties, fines, liabilities and legal claims. In addition, the potential failure of our systems or our third-party providers’ systems, which could interrupt service, cause us to lose business, increase our costs and expose us to liability.

The performance of our payment processing operation carries fraud and credit risk, including the risks of intentional unauthorized payment transactions, financial or non-financial losses from misrepresentations, and the inability of merchants or clients to