Business credit growth overtakes housing credit

Monthly growth in business credit has overtaken growth in housing credit for the first time since 2008, marking a significant shift in the lending market.

According to the latest Reserve Bank lending data, housing finance balances grew by 0.5 per cent in February, compared with growth of 0.6 per cent in January.

Business credit balances grew by 0.6 per cent in February, after growing 0.8 per cent in January.

The business credit market has been gathering momentum slowly since the middle of 2013, when the annual growth rate was below one per cent. On the latest figures, the annual growth rate in business credit balances is 5.6 per cent.

The annual growth rate in housing credit is 7.2 per cent.

The latest Australian Prudential Regulation Authority banking statistics put the growth in business lending much higher, at 1.2 per cent in February and 9.3 per cent over the 12 months to February.

According to APRA, some of the banks with high levels of business lending include AMP Bank, with 33.7 per cent growth in its business book over the past 12 months, Bendigo and Adelaide Bank (16.3 per cent) and Laiki Bank (30.3 per cent).

Among the major banks, APRA data shows ANZ's business lending book growing by 7.1 per cent over the past 12 months, Commonwealth Bank's by 7.2 per cent, National Australia Bank's by 6.6 per cent and Westpac's by 13.9 per cent.

Lenders appear to have paid heed to APRA's call to moderate lending to residential property investors. Growth in investor housing balances slipped back from 0.9 per cent in January to 0.8 per cent in February.

Personal finance activity, which picked up towards the end of last year, has weakened again this year. According to the RBA, personal lending balances were down 0.1 per cent in December, down another 0.1 per cent in January and down 0.3 per cent in February.