Demand for mortgage finance continues to be weak, and demand for business finance is almost non-existent, according to Australian Prudential Regulation Authority data released yesterday.The mortgage portfolios of APRA-regulated financial institutions increased by 1.7 per cent over the three months to May and 7.2 per cent over the 12 months to May.National Australia Bank is growing its book at twice the rate of system growth - 3.8 per cent over the past three months and 15.8 per cent over 12 months.This is clear evidence that its strategy of keeping its home loan rates below those of its big bank peers, cutting fees and aggressively promoting cheap loans through its online operation, UBank, is working.All the other big banks have dropped below system. ANZ's book grew by a healthy 9.2 per cent over the past year, but, over the past three months, growth has dropped back to 0.9 per cent.Westpac (including St George) was up 1.5 per cent over three months and up six per cent over the year. Commonwealth Bank (including Bankwest) was up 1.3 per cent over three months and five per cent over 12 months.The country's fifth largest mortgage lender, ING Direct, had very modest growth of 0.5 per cent over the three months, and 0.9 per cent over the 12 months.Lenders that reported strong growth include AMP Bank, Bendigo & Adelaide and HSBC.Business loan books increased by an average of 0.2 per cent over the three months to May and by 1.1 per cent over the 12 months to May.Business flows for the big banks were volatile. NAB reported strong growth over the 12 months, but suffered an outflow of 1.1 per cent for the three months. ANZ showed weak performance over the 12 months - down 10.1 per cent - but has grown its book by 0.9 per cent over the past three months. Likewise, Commonwealth and Westpac were below system over the 12 months but picked up share over the past three months.