Commercial loan decrease has funded growth in consumer debt

According to data just released by the Bank of Canada, commercial lending restarted its swoon in January 2010. The category is “Business loans to Canadian residents for business purposes”:

December: $191.563 billion
January: $185.679 billion
February: $183.759 billion
March: $184.089 billion
April: $181.811 billion
May: $180.191 billion
June: $177.865 billion
July: $176.164 billion
August: $175.318 billion
September: $172.652 billion
October: $172.592 billion
November: $169.928 billion
December: $170.930 billion
January: $169.423 billion

Commercial and corporate lending by chartered banks to Canadian-based businesses is at its lowest level in the past few years. Down $22 billion since December 2008’s peak.

Where has that capital gone, you ask?

According to the Bank’s own stats, outstanding personal lines of credit have grown $35 billion since December 2008 (a full 21%). Starting last May, banks had more capital out to consumers via PLOCs than they did to business in the form of commercial and corporate loans.

If we were sailing, you might call that tacking downwind.

Over the 13 months of data, total non-mortgage credit outstanding has held steady at $624.5 billion. Who says the banks aren’t lending?

MRM