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Bank loan books grow to over $2.1tn

Australia’s banks wrote an additional $8 billion in mortgages in May, taking their total loan books to over $2.1 trillion, new APRA stats show.

The Australian Prudential Regulation Authority (APRA) has released its monthly authorised deposit-taking institution (ADI) statistics for May 2023, revealing that both owner-occupier and investor loans book grew over the month.

Over the month, the volume of owner-occupier loans on Australian bank books rose by 0.57 per cent, from $1.41 trillion to $1.42 trillion.

Meanwhile, investor loan books grew by 0.29 per cent, from $683 billion to $685 billion.

Overall, the total mortgage book of Australian ADIs grew 0.48 per cent to $2.10 trillion.

NAB owner-occupied book grows to over $200bn for the first time

Australia’s largest lender, the Commonwealth Bank of Australia (CBA), saw its total mortgage book grow to over $544 billion by the end of May, an increase of over $2 billion.

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CBA’s owner-occupied book was up $1.5 billion to $365.3 billion at the end of the month while its investor book grew by 0.4 per cent to $179 billion.

Westpac Banking Corporation had the second-largest mortgage book, closing May with $290.4 billion in owner-occupied mortgages and $155.2 billion in investor loans. Its total housing loan portfolio was therefore up to $445.6 billion, up by around $1.6 billion on April’s figures.

National Australia Bank (NAB) also grew its book by $1.6 billion after its owner-occupied book grew to over $200 billion for the first time. Its investor book rose marginally to $108.2 billion.

While Australia and New Zealand Banking Group (ANZ) has the smallest loan book of the big four banks, it grew its mortgage book by the most. In May, ANZ increased its housing loan portfolio by more than $2.3 billion — increasing owner-occupied loans to $185.3 billion and investor loans to over $93 million.

The big four banks have been growing their books month on month despite heightened competition and a slowdown in new loan commitments.

According to the Australian Bureau of Statistics, new loan commitments have been falling month on month, with owner-occupier loan volumes down 24 per cent on where they were in April 2022, before interest rates started rising.

In a bid to try and gain more mortgage clients facing borrowing pressures as rates rise, the majors have been tweaking their offerings recently.

Both Westpac and CBA rolled out reduced serviceability buffers for certain borrowers while ANZ remains the only big four bank to have a cashback offer in market.

The Reserve Bank of Australia (RBA) is set to meet on Tuesday (4 July), with the majority of economists expecting the cash rate to increase by a further 25 bps to 4.35 per cent.

[Related: Inflation falls, but is it enough to hold rates? Economists ask]

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