Overdrafts fastest growing loan segment

The flight to quality of Australia's residential borrowers appears to be gaining pace, with Commonwealth's residential lending book increasing by $13.7 billion in the half to June and $9.4 billion in the half to December 2007, to total $187 billion - for a well above system 14 per cent annual growth.

The bank increased the proportion of loans sourced through mortgage brokers to 39 per cent from 35 per cent in spite of cuts to commissions, which is due in part to brokers having fewer lenders on their panels this year.

CBA said mortgage arrears are similar to prior years with a small tick up in the June quarter. The proportion of low doc loans in the portfolio increased one percentage point to 3.5 per cent.

Overdrafts appear to be becoming the short-term vehicle of choice for the bank's customers, with outstanding balances increasing by a quarter for the year to $20 billion, with the credit card portfolio only increasing five per cent to $7.6 billion.

Term loans increased 22 per cent to $83.4 billion, with lease financing falling six per cent to $4.2 billion.

Australian loans, advances and other receivables in total increased 17 per cent in 2008 to $309 billion, with international growth much weaker at five per cent or $56 billion outstanding.

On the liability side of the balance sheet, term deposit balances increased 41 per cent to $72 billion. At-call and short term deposits increased only seven per cent to $118
billion.

Deposits not bearing interest fell eight per cent to $6.1 billion, with total overseas deposits increasing five per cent to $29.7 billion.