The pace of lending to the non-bank private sector by financial institutions in Australia has remained unchanged for the second month in a row. According to the latest RBA figures, private sector credit grew by 0.4% in April, down from the 0.5% growth rate recorded in March and in line with the 0.4% consensus estimate. The year-to-April growth rate remained unchanged at 5.1% as lenders expanded loans to the business sector and owner-occupiers. Loans to housing investors stagnated while the value of all personal loans contracted.
The overall increase was driven equally by business loans and “owner-occupier” loans. These two segments account for nearly 75% of outstanding loans by value. Any change in the total value of either of them has a large effect on overall credit growth.
Business credit growth slipped back from a revised growth rate of +0.7% in March to +0.5% in April while its annual growth rate increased for a fourth month in a row, this time from 4.2% to 4.3%. Owner-occupier loan growth repeated March’s 0.6% growth rate with a +0.6% increase in April but its annual growth rate slipped back from 8.1% to 8.0%.