Deposit growth accelerates for banks
ABS Financial Accounts got a rare - and deserved - mention in the Australian Bankers Association's submission to the Senate inquiry into banking.
At the end of June 2010, bank funding was at A$1.47 trillion, an increase of $100 billion, or 7.3 per cent, over the previous year, the ABA wrote, in an overview of the sources of bank funding, drawing on the ABS' Financial Accounts.
The Australian Bureau of Statistics' Financial Accounts follow the much better-known national accounts each quarter but receive virtually no attention.
These show that retail deposits constitute 53.5 per cent, or $787 billion, of bank funding.
Wholesale funding (or borrowing by banks) accounts for 46.5 per cent, or $685 billion, the ABA writes.
Short-term wholesale funding, of less than 12 months duration, provided 16.6 per cent of all bank funding.
At $244 billion, the short-term funding pool was $140 billion smaller than two years earlier. Short-term funding, excluding bills of exchange, was 62 per cent domestic and 38 per cent offshore.
As the many Basel III rules come into force, banks will rely less than in the past on this style of funding.
Long-term wholesale funding made up 29.9 per cent of banks' funding, a percentage banks need to increase.
The ABA noted that banks sold $130 billion less in bonds in 2010 than they did two years prior.
Offshore investors own 74 per cent of long-term bank bonds and domestic investors 24 per cent.
The Financial Accounts show that deposits were $787 billion at the end June 2010, a rise of 9.2 per cent or $66 billion over the past year.
The ABA noted that at the peak of the flight to deposits, in late 2008 and early 2009, bank deposits had been growing at the fastest annual pace in the life of the 20-year data series, at almost 25 per cent.
Australian Prudential Regulation Authority data for October 2010 shows that bank deposits increased at a rate of 11 per cent (annualising the last four months), a sign of recent success by the banks in drumming up deposit flows.