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Large infrastructure privatisation deals are creating strong credit growth for Australia's transport, storage and utilities industries, according to the Reserve Bank.
In its latest statement on monetary policy the RBA noted that business credit growth has picked up recently after slowing over the first half of 2016.
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“This is consistent with business loan approvals, which have grown strongly in recent months, partly due to the financing of some large infrastructure privatisations,” the central bank said.
“Consistent with this, the recovery in business credit growth has been driven by credit extended to large businesses, while credit extended to smaller businesses has continued to grow at a moderate pace.”
Across industries, the bank found that business credit growth to the transport and storage and utilities industries has picked up, consistent with those few large infrastructure privatisation deals.
Meanwhile, lending for residential property development also remains strong.
“Outside of this, lending remains mixed, partly reflecting decisions by some lenders to reduce credit exposures to businesses in selected industries, such as mining and manufacturing.
“Consistent with the announced intentions of some major banks to improve the profitability of their business lending, the implied spread on major banks’ business lending stabilised in 2016, having fallen over the previous few years.”
The RBA explained that interest rates on outstanding small and large business borrowing are estimated to have been little changed over the past few months.
“For large business, interest rates on new fixed-rate loans have increased recently, although rates on new loans continue to be lower than average outstanding rates.”
[Related: Non-major bank lifts business loan rates]
