Aussie deposits hit record highs amid uneven loan landscape

By Maria Irene
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Australians seem to have discovered the ancient art of saving even as the cost of living skyrockets and interest rates rise faster than a kangaroo on a pogo stick. According to recent data, household deposits have reached a staggering new record high of nearly $1.42 trillion in September. This rise occurred despite 12 consecutive rate hikes by the Reserve Bank of Australia (RBA). Compared to August, deposits increased by $11 billion and grew by a whopping $99.6 billion year-over-year. In fact, deposits have consistently grown every month since May 2021, with the exception of a little hiccup in June 2023.

But it’s not just any form of deposit that’s witnessing a surge. Specifically, deposits include money in savings accounts, term deposits, transaction accounts, and mortgage offset accounts. Particularly striking is the fact that households channelled an impressive $50.8 billion into term deposits in the September quarter alone. This marks the strongest growth in these types of accounts since December 2008, signifying a conservative approach towards investments amidst economic uncertainties.

On the flip side, loans to households present a more complex picture. Commonwealth Bank of Australia (CBA) saw the total value of its household mortgages drop for the third consecutive month—a first since 2002. Meanwhile, ANZ’s home loan book grew by 0.91%, or $2.58 billion, and Westpac and NAB followed suit with increases of 0.27% and 0.31% respectively.

As for the “Big Four” in the banking world, they’ve had a mixed bag of results. CBA holds $542.22 billion in loans, but experienced a month-over-month drop of $793 million. Westpac increased its loans to $455.50 billion, an upswing of $1.23 billion. National Australia Bank (NAB) had $312.31 billion in loans, increasing by $955 million. ANZ held $285.67 billion, marking an increase of $2.58 billion. In essence, Australians are playing hard to get with some banks but keeping the money flowing in others.

And don’t forget the role of incentives. ANZ is currently the only big four bank offering a cashback deal. The number of lenders extending such offers has almost halved since CBA decided to pull its cashback from the market.

Governor Bullock summed it up rather succinctly, pointing out that Australians are indeed saving, albeit at a slower pace than before. The rate of deposit growth has slowed down a tad compared to previous months. But then again, when you’re already sitting on a mountain of cash, it’s hard to keep climbing at the same speed.

All in all, it’s clear that despite the economic pressures and the RBA’s fondness for rate hikes, Australians are not only holding onto their money but also accumulating more of it. At the same time, they’re becoming choosier when it comes to taking out loans, making the entire financial landscape down under an intriguing one to watch. Whether this trend of high deposits and selective borrowing will continue remains to be seen, but for now, Aussie households seem to be financially stronger.


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