Commonwealth Bank and Westpac have combined to take 80% of credit growth over the six months from March to October 2009. During this period, credit growth had slowed to its lowest level since 1992.

Our domestic banks wrote $53bn of credit, while foreign and regional banks & non-bank lenders reduced their lending by $43bn, netting $10bn increase over the 6 months. Despite the slowing, we may have hit the low point in the credit cycle as there are signs of increased credit growth for Australia in 2010.

What does this signal?
There is a clear lack of competition at the moment. CBA (who own Bankwest, and 33% of Aussie Home Loans) and Westpac (who own St George, Bank of SA, RAMS, Bank of Melbourne) are very dominant in Australia, using their advantage with domestic deposits to provide a cheaper source of money. There was a big flight to deposit safety in banks during the GFC, and overseas money is still expensive for our other lenders who are struggling to compete.  So much for the 4 pillars policy…

Remember, if you are confused which lender to use, Plan Assist have over 21 residential and 12 commercial lenders on their panel providing you with choice to suit any need. Call Anton or Garry with your loan scenarios on 02 9449 2333 for the latest and greatest on lender choice.