Bank Lending to Business
The Reserve Bank of Australia regularly releases figures on bank lending to business. We have graphed below the total level of Bank lending to business since 1998:
Banks have $675 billion of outstanding loans to companies as at Sptember 2009. Five years ago that number was $326 billion. That is a 107% increase in total bank loans to companies in five years. Corporate Australia is significantly more indebted than it has ever been. The standout increase is in loans greater than $2million which has increased from $124 billion in 1998 to $475 billion in 2009, being a 183% increase.
It amazes us that this simple fact is rarely quoted. Even the Reserve bank of Australia barely addresses this fact in its quarterly Financial Stability Review. Business asset values have declined by anywhere from 30% to 50% and when you combine that with a large debt burden then equity values will reduce considerably and corporate insolvencies will rise.
The full list of our statistics follows:
- Statistics for a summary of all relevant statistics and our comments
- ASIC statistics for an overview and our comments on the ASIC statistics
- Company Insolvencies per Year (ASIC based statistics)
- Insolvency Appointments by Secured Creditors per Year (ASIC based statistics)
- Restructurings as a percentage of Company Insolvencies (ASIC based statistics)
- Reserve Bank of Australia statistics for an overview and our comments on the RBA statistics
- Bank Lending to Business (RBA based statistics)
- Household Debt to Annual Disposable Income (RBA based statistics)
