The pace of lending to the non-bank private sector by financial institutions in Australia remained stuck at just under 5% for the third month in a row. According to the latest RBA figures, private sector credit grew by 0.4% in February, up from the 0.3% growth rate recorded in January and more than the 0.3% consensus estimate. The year-to-February growth rate of 4.9% also remained unchanged from January’s figure of 4.9% as growth in home loans and business loans offset a slight fall in personal loan growth.
The overall increase was driven by owner-occupier loans, which increased by 0.6% over the month or 8.0% for the 12 months to February. Business credit growth of +0.1% reversed a 0.1% fall in January and its annual growth rate increased for the second month in a row, this time from 3.4% to 3.6%. These two segments of total lending account for nearly three-quarters of new loans by value and thus any change in them has a greater effect on overall credit growth.