Tuesday 04 February 2014 by FIIG Research Legacy

Deposits rise faster than loans in 2013

Last week, the Australian Prudential Regulatory Authority published its latest Banking Statistics. The data revealed that the overall household savings balances grew faster in 2013 than loans on banks’ balance sheets. This article provides a brief summary

Key points:

1)     Household deposits rose faster than loans on banks’ balance sheets

Savers switched from term deposits to high yield accounts, while savings rates remain high

The Australian Prudential Regulation Authority (APRA) released its latest Banking Statistics report in December showing that overall household deposits rose faster in 2013 than loans on banks’ balance sheets. According to APRA data, total household deposits grew at 9.74% ($7,325.99bn as at year end 2013 compared to $6,675.88bn YE12), with December 2013 performing particularly well with an additional $643.07bn versus December 2012 with $584.18bn. However, household loan balances grew only 6.5% to $14,143bn in 2013 compared to $13,269bn in 2012. It appears that households tend to switch from term deposits to high yield accounts and that the overall savings rate remains high.

The four major banks reported a slight increase in their household deposit books in December 2013. Commonwealth and Westpac deposits rose by 1.6% (from $180.82bn to $183.76bn) and 1.4% (from $145.77bn to $147.84bn) respectively, while National Australia Bank increased 1.9% (from $92.52bn to $94.31bn) and ANZ Banking Group up by 1.5% (from $95.14bn to $96.59bn).

Regional banks grew household deposits by higher rates, but from lower bases. AMP’s household deposits grew by 8.9% (from $1.9bn to $2.07bn); Citigroup was up 7.10% (from $3.38bn to $3.62bn); HSBC grew 14.6% (from $5.27bn to $6.04bn) and ING Bank Australia deposits improved 4.34% (from $18.87bn to $19.69bn).