CBA Records Strongest Asset Finance Growth on Record
(25 August 2023 – Australia) New CBA data reveals a record number of businesses financing new transport and equipment in the past financial year, with electric vehicles and technology upgrades helping businesses to drive growth.
New data from CBA shows investment by Australian businesses in machinery and equipment upgrades has continued to grow, with the bank funding record volumes in new asset financing.
The release of CBA’s data coincides with new industry data from East & Partners showing CommBank is now the largest primary asset finance provider in the Australian market for FY233, largely driven by gains in the microbusiness and commercial segments. The long running analysis is based on direct interviews conducted by East & Partners in May 2023 with a national sample of 1,289 enterprises with asset financing arrangements in place and an annual turnover of A$1 million plus.
CBA’s lending across a variety of assets grew significantly over the 2022-23 financial year, with transport among the top performers. Assets such as cars (up 30 percent), heavy trucks (up 27 percent) and trailers (up 26 per cent) topped the list, compared with fiscal 2021-22.
CBA has seen strong growth in Electric Vehicles (EVs) financing, up 235 percent in the last 12 months.
The jump is supported by CommBank’s recently launched Green Vehicle and Equipment Finance which offers discounts of up to one percent off the standard rate for new and used EV or hydrogen powered cars, trucks, vans or buses, and discounts of up to 0.5 percent on other qualifying assets including electric and hydrogen powered machinery, solar, wind and hydro-powered equipment and charging and storage equipment valued up to A$250,000.
Industry VFACTS data reinforces the EV trend, with combined sales of electric cars, SUVs, and light commercial vehicles tripling year-on-year to make up 7.4 percent of all vehicles sold in the country. That figure was less than two percent in FY22.
CBA General Manager Asset Finance, Chris Moldrich, said businesses were benefiting from orders placed in advance and were bringing forward purchases to take advantage of government incentives.
“The increased supply of vehicles to Australia has enabled businesses to take the opportunity to upgrade assets that they held on to for longer than expected during Covid. It’s also clear businesses were motivated to upgrade their eligible vehicles and equipment to take advantage of the Federal Government’s Instant Asset Write-Off Scheme before 30 June,” Mr Moldrich said.
“Electric vehicles were the fastest growing vehicle type last financial year and Australian businesses are set to play an outsized role in EV adoption across the country,” Mr Moldrich said.
“While more public sector investment in charging infrastructure is needed, particularly in regional locations, EV usage is growing strongly as the market matures and becomes more affordable. That’s helped by government concessions and an expanding choice of vehicles beyond luxury models.”
Mr Moldrich said business were also turning more attention to protecting their businesses from cyber threats with a 43 percent increase in businesses investing in replacing and upgrading computer equipment.
“In today’s current environment where cyber security is a top concern for businesses across the country, high levels of investment into technology reflect how businesses are choosing to respond to this growing threat.”
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