Australian Business Lending Industry Soars In a Stagnant Economy

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Leading Australian financial planning firm, Custom Wealth Solutions, updates its services in order to provide tailored financial advice and services to private and business clients, to help them gain financial stability, and to give a solution for the business market that continues to struggle through this economy.

Custom Wealth Solutions

Custom Wealth Solutions

Australia is not the only market enjoying a growth in lending. Goldman’s analyst Ben Koo predicts the world leading economies as a whole will enjoy a 6% growth across the board and qualifies the success of Australian banks as a result of worldwide growth.

Whether one is looking at job figures, Spain and Greece’s banking meltdown or the slowing down of economic powerhouses such as China and Brazil, the writing is on the wall for double-dip recession or at the very least a long, slow and painful recovery. However, if one is looking at Australia’s business lending sector, one may ask why all the complaining because things seem to be going just fine.

According to a recent analysis of Goldman Sachs data on business lending, Australia’s bank hit a three-year peak in May 2012. ANZ, the Australia and New Zealand Banking Group, which has reported a strong growth in recent years, was the engine behind the outstanding performance of Australian banks.

The good news for the lending sector is that these figures may forecast an ongoing growth pattern. At least that is what the Australian Prudential Regulation Authority is predicting. According to an analysis of Goldman Sachs data by Australian Prudential Regulation Authority, the growth of lending by Australian banks to non-financial corporations increased by 7.2% in the last year, while loan balances jumped by 1%.

Australia is not the only market enjoying a growth in lending. Goldman’s analyst Ben Koo predicts the world leading economies as a whole will enjoy a 6% growth across the board and qualifies the success of Australian banks as a result of worldwide growth.

Asia Pacific Markets

However, business lending in the Asia Pacific as a whole is still suffering. According to a report by Reuters, lending in the Asia Pacific (excluding Japan) dropped by 26% during the first semester of 2012 when compared to the same period in 2011. The cause for this seems to be the increase in bank funding costs, which has made lending expensive and discouraged companies from borrowing. Custom Wealth Solutions CEO Chris Appleyard says, “Banks are looking to take considerable levels of equity from all business owners due to their cautious outlook on the economy.” Appleyard further adds, “This has made further borrowing very difficult if you consider current valuations on business and personal assets.”

Japan is another country, together with Australia, that is showing resilience during the current economic slowdown. Currently Japan is Asia’s largest loan market. In 2012, Japan saw its lending increase from $138.7 billion to $163 billion. Apart from Japan, only China could boast a modest growth: less than $7 billion.

Housing Loans

Housing loans are also on the rise in Australia. Australia’s central bank reduced interest rates during the end of last year and consumers responded by increasing the number of loan applications. Successful loan applications also rose, albeit modestly, by 0.2%. The total value of Australian loans also grew by 1.2% to A$20.5 billion. What is particularly encouraging is that 16.4% of the homes financed in the month of April were loans for first-time buyers.

The lending sector can provide investors in self-managed super funds with lucrative returns at relatively low risk levels. However, it is crucial to have an in-depth knowledge of the market. Leading Advisory Firm, Custom Wealth Solutions has taken to the recruitment of specialist commercial bankers and lending experts to address this complex need for investors, as well as to provide a solution for the business market that continues to struggle through this economy.

Custom Wealth Solutions (CWS) is an Australian privately owned, independently operated private wealth and advisory firm. They provide comprehensive, holistic and customised financial strategies for private and business clients and are the industry leading professionals for financial advice, superannuation, SMSF's, insurance, lending and investments.

To know more about the company and their services, you may call them at 1300 001 297, or visit their website at http://www.customwealth.com.au/.

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Chris Appleyard
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