Figures show impact of APRA's investment lending crackdown

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Year-on-year growth in investment lending has shown signs of cooling, suggesting the recent clampdown has begun to finally take effect.

Total investor credit growth in the twelve months to July 2015 has slowed to 11.4%, according to APRA’s latest banking statistics released on Monday, following 15% year-on-year growth in the twelve months to June 2015. Annual growth now sits just above APRA’s guideline of 10%.  

Westpac – which is also Australia’s largest lender to investors – is the only major bank to keep growth below APRA’s guideline, recording investment growth of 9.6% in the year to July. Westpac’s total investment loan book currently sits at $156.3 billion. 

Commonwealth Bank recorded growth just over APRA’s limit, at 10.1%, while ANZ record year-on-year growth of 11.8%. NAB is still well above the banking regulator’s guidelines, with year-on-year investment lending growth of 14.3%.

However, NAB is the only major lender who did not announce a blanket rate increase on new and existing investment loans. The third-largest lender to investors instead announced increased interest rates on interest-only home loans. It is also worth noting that NAB’s investor loan portfolio is still $63 billion less than Westpac’s.  

Macquarie Bank posted the largest year-on-year percentage increase in investment lending over the twelve months to July, growing its investment lending by 79% over the period. However, the non-major’s total investor loan book is just $9.2 billion. 

By dollar value, Westpac posted the largest increase, despite being the only major lender to slow growth below APRA’s 10% limit. Over the twelve months to July, the major bank wrote $13.7 billion worth of investment loans

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