Research director highlights the factors that may impact the performance of banks
Household bank deposits saw a notable decline in June, dropping by $11.5 billion, marking the first decrease in a year. Despite this dip, the overall deposits remain high at $1.47 trillion, which is $98.59 billion more than the same period last year, according to the Australian Prudential Regulation Authority (APRA).
The drop in deposits is attributed to end-of-financial-year spending and rising living costs, as households tapped into their savings, transaction, and offset accounts. Sally Tindall (pictured), research director at RateCity.com.au, pointed out that while some households have been depleting their savings, others are likely to see a rebound in July due to tax returns and tax cuts.
Contrary to the decline in deposits, home loan books continued to grow robustly. The total value of housing loans to households, which includes both owner-occupier and investor loans, increased by $14.88 billion in June, representing a 0.7% rise.
“The total value of housing loans among ADI’s grew by a sizable 0.7 per cent in the month of June – the largest rise in percentage terms since June 2022,” said Tindall.
Increase seen in home loan books
Commonwealth Bank of Australia (CBA) led this growth with a $4.15 billion increase, translating to a 0.7% rise in its home loan book. Macquarie Bank also showed strong performance, with a $1.74 billion (1.5%) increase from May to June 2024 and a substantial $13.33 billion (12.5%) rise compared to the previous year.
RateCity.com.au highlighted the recent merger between ANZ and Suncorp positions ANZ to surpass National Australia Bank (NAB) in terms of residential mortgages and deposits. This merger boosts ANZ’s market share to 16.0%, positioning it as the third-largest home loan lender in Australia.
The table below illustrates the significant growth in housing loans among the major banks:
|
Bank |
June 2024 Amount |
Monthly Change |
Year-on-Year Change |
Current share of ADI* market (June) |
|---|---|---|---|---|
|
CBA |
$559.00 billion |
+$4.15 billion |
+$12.68 billion |
25.2% |
|
$475.43 billion |
+$2.94 billion |
+$25.98 billion |
21.5% |
|
|
NAB |
$320.30 billion |
+$1.02 billion |
+$10.25 billion |
14.5% |
|
ANZ |
$300.24 billion |
+$2.01 billion |
+$20.00 billion |
13.6% |
|
Macquarie |
$119.91 billion |
+$1.74 billion |
+$13.33 billion |
5.4% |
|
Suncorp |
$53.27 billion |
+$177 million |
+$1.87 billion |
2.4% |
While the June decline in household deposits might appear concerning, it is not unprecedented. Historically, June has seen similar drops in household deposits, RateCity.com.au noted. Looking forward, the expectation is that household deposits will bounce back, buoyed by the influx of funds from tax returns and ongoing tax cuts.
Do you have anything in mind about these findings? Let us know in the comments below.
