The pace of lending to the non-bank private sector by financial institutions in Australia has picked up after three months of sub-5% growth. According to the latest RBA figures, private sector credit grew by 0.5% in March, up from the 0.4% growth rate recorded in February and more than the 0.4% consensus estimate. The year-to-March growth rate increased from 4.9% to 5.1% as lenders expanded loans to the business sector and, to a slightly-lesser extent, owner-occupiers.
The overall increase was driven almost evenly by business loans and “owner-occupier” loans. Business credit growth accelerated from a sluggish 0.1% in February to 0.8% while its annual growth rate increased for a third month in a row, this time from 3.6% to 4.2%. Credit Suisse’s Equity Research team said they “think it is too early to get excited about a return of business credit” as strong months have typically been followed by “two or three months” of weak figures.