(3 July 2012 – Australia) The resource states of Western Australia and Queensland have increased their share of overall business lending balances by a substantive amount and now account for 13.2 percent and 19.7 percent respectively of total business loan balances, new research from East & Partners has shown.While the major banks have traditionally avoided large, mono-line lending to the
big resource houses, these new numbers show that the mining services companies
and those supplying the mining houses, are borrowing large sums from their
banks. The demand for credit from these companies, often SME’s, is a complete
contrast to their peer group which is currently showing very low, and decreasing
levels of credit demand.
These low borrowing intentions among non mining/resources companies (6.1 percent
of all businesses have planned new borrowings in the next six months) have
coincided with further declines in forecast gearing ratios.
Further highlights of the report include:
-
Business Deposit/Lending Volumes by Segment
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Term vs On Call Deposits Volumes by Segment
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Term Deposit Tenures
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Business Churn Levels in On Call Deposits by
Segment -
Business Deposit Balances/Business Lending
Balances – Major Banks -
Total Deposit/Total Lending Market Share – Major
Banks - Lending and Deposit Ratios
East & Partners’ Head of Client Development David Brown commented, “East has
identified this rapid growth occurring in both Queensland and Western Australian
Micro and SME businesses, which really started in late 2009. Initially beginning
with business very directly connected to the resources “boom”, we have seen a
significant “trickle through” effect into a wider and wider hinterland of
businesses around the resource and mining sector in both states.”
“Without this broadly based growth story surrounding resources, demand for
business credit nationally would be even flatter than it is. Based on borrowing
intentions from suppliers to the mining houses, especially SMEs, we see this
appetite for debt funded engagement with the “boom” continuing at the lower end
of the business market”, Mr Brown added.
About East & Partners’ Deposit Funding & Debt Index
A monthly analysis across Australia’s total business and consumer deposit and
lending markets, based on data sourced from APRA. The ADI data is overlayed with
a set of demand-side analyses based on East & Partners’ continuous
whole-of-market customer research programs to produce the Index’s set of ratio
indicators. The Index focuses on critical market measures including business
versus retail deposit volume ratios, the ratio of deposit versus lending by bank
by market segment, deposit market share and the total market deposit funding
index.
Also reported each month are unique segmentations based on depositor size and,
importantly given BASEL III’s impact, the Index also splits On Call and HYOD
deposit volumes by segment from Term Deposits across 3, 6 and 12 month tenures –
hot and sticky deposit business flows, tied versus free deposit balances,
deposit churn forecasts and rate triggers for depositor switching.
Note: Business Depositor Segments:
› Institutional – A$530 million plus
› Corporate – A$20-530 million
› SME – A$5-20 million
› Micro – A$1-5 million
For more information or for further interview based insights from East &
Partners on this DFDI Index, please contact:
Sian Dowling
Marcomms & Client Services
East & Partners
t: 02 9004 7848
m: 0420 583 553
e: sian.d@eastandpartners.com