Credit in a prolonged period of weakness

Data released by the Reserve Bank and the Australian Prudential Regulation Authority on Thursday show that demand for mortgages and business credit remains subdued.

The RBA figures show that business credit aggregates fell 0.2 per cent in February and housing finance aggregates rose 0.4 per cent. Over the 12 months to February business credit aggregates increased by 2.3 per cent and mortgages by 4.4 per cent.

Westpac senior economist Andrew Hanlan said in a note that total credit growth has been stuck at around 3.5 per cent for three years, representing "a prolonged period of weakness".

Personal credit aggregates continue to decline - falling 0.3 per cent over the 12 months to February.

The APRA figures show mortgage portfolios growing by 3.6 per cent over the 12 months to February.

Among the market's strong performers were Macquarie Bank, whose mortgage book has grown by 10.3 per cent to A$12.2 billion, Suncorp (up 11.8 per cent), AMP Bank (up 9.3 per cent), National Australia Bank (up 7.2 per cent) and Bendigo and Adelaide Bank (up 5.9 per cent).

Commonwealth Bank and Westpac grew below system.

Household deposits grew by 8.5 per cent over the 12 months to February, according to APRA.

APRA's figures show a 6.8 per cent increase in business lending in the 12 months to June. Commonwealth Bank, NAB and Westpac all grew their business loan books above system.