Deposit growth still healthy, despite low rates

Growth in mortgage lending has plateaued, with Reserve Bank data showing that the annual growth rate was unchanged in November, December and January. It remains to be seen what impact last month's rate cut will have on February's figures.

According to the RBA, lenders' mortgage balances increased by 0.6 per cent in January. For the 12 months to January mortgage balances grew by 7.1 per cent - the same annual rate of growth the RBA has reported since November.

Owner-occupier mortgage balances increased by 0.5 per cent in January and by 5.7 per cent over the 12 months to January.

Investor mortgage balances grew by 0.8 per cent in January and by 10.1 per cent over the 12 months to January.

The total value of loans to owner-occupiers in January was A$941.3 billion and the total value of mortgage lending to investors was $491.7 billion.

According to the latest Australian Prudential Regulation Authority banking statistics, ANZ, Heritage Bank, Macquarie Bank, ME Bank, National Australia Bank and Suncorp had above-average growth in their mortgage books.

Commonwealth Bank's mortgage balances grew by 0.3 per cent in January and Westpac's by 0.4 per cent.

Most of the lenders with above-average growth in their investor mortgage balances were second and third-tier financial institutions. In January they included AMP, Defence Bank, Heritage Bank, Macquarie Bank, ME Bank, MyState, NAB, Suncorp and Teachers Mutual Bank.

Personal loans balances were unchanged in January and grew by 0.8 per cent over the 12 months to January.

Business credit balances grew by 0.8 per cent in January and by 5.5 per cent over the 12 months to January. Demand for business credit is growing fast; in January last year, the annual rate of growth in business credit was 1.9 per cent.

According to APRA, growth in deposits continues to outpace growth in mortgage lending. Over the three months to January household deposit balances grew by 2.8 per cent, compared with 1.8 per cent growth in mortgage balances.