Major banks hit hard by credit crunch

The Australian Prudential Regulation Authority’s (APRA) latest banking statistics have highlighted a decline in owner-occupied mortgage growth reported by ANZ, the Commonwealth Bank (CBA) and NAB.

According to the data, ANZ’s owner-occupied loan portfolio grew $8.7 billion in the year to 31 October 2018, from $170 billion in October 2017 to $178.7 billion, compared to a $14.5 billion increase in the previous corresponding period.

CBA also reported weaker growth in its owner-occupied portfolio in the year to 31 October 2018, with its loan book thickening by $13.2 billion to $291.7 billion, compared to a $16.5 billion rise in the year prior.

Further, NAB’s owner-occupied portfolio rose by $9.5 billion in the year to 31 October 2017, from $135.3 billion $144.8 billion, compared to $8.8 billion growth in the 12 months to 31 October 2018.

Westpac, however, was the only major bank to report an improvement in the growth of its owner-occupied loan portfolio, which increased by $14 billion to $259.5 billion in the 12 months to 31 October 2018, compared to a $12.7 billion rise in the previous 12 months.

Investor loan books thinning

However, when assessing the big four’s investor lending portfolio, all of the major banks reported declines over the past 12 months.

ANZ’s investor lending portfolio grew by $2 billion in the 12 months to 31 October 2017, compared to drop of $2.3 billion in the year to 31 October 2018, from $82.7 billion to $80.4 billion.

CBA’s investor lending book increased by $2.2 billion in the year to 31 October 2017, from $131.6 billion to $133.8 billion, but fell to $132.7 billion by the end of October 2018.

Moreover, NAB’s investor loan book grew by $5.3 billion in the year to 31 October 2017, from $99.1 billion to $104.4 billion, compared to an increase of $1.4 billion in the 12 months to 31 October 2018. 

Westpac, which has the largest investor loan portfolio, also reported slower growth in the year to 31 October 2018, with its investor loan book rising by $2.9 billion to $152.4 billion, compared to a $9.4 billion increase in the previous corresponding period.

The publication of APRA’s latest banking statistics coincides with the release of the Australian Bureau of Statistics’ (ABS) Dwelling Approvals data, which has revealed that in seasonally adjusted terms, housing approvals fell by 1.5 per cent in October and 13.4 per cent year-on-year.

“The trend for total dwellings has been steadily declining over the past 12 months,” Justin Lokhorst, director of construction statistics at the ABS, said.

“The decrease in October was mainly driven by private sector dwellings excluding houses, which fell 1.8 per cent. Private sector houses also declined, by 0.5 per cent.”

 [Related: Credit squeeze not helping cooling market: CoreLogic]