Is the credit crunch ending?

The credit crunch is starting to thaw a snick.

According to data just released by the Bank of Canada, commercial lending had its first uptick month in December ’09. 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

Commercial and corporate lending by chartered banks to Canadian-based businesses is still down about $21 billion year-to-date, or about 11% of what was outstanding as of December 2008.

It is hard to get too excited about the data. Flat September/October outstanding loan data suggested the worst was over, but it turned out to be a head fake as outstanding loans dropped by $2.66 billion in the month of November. The largest monthly drop so far this year (on a percentage basis), and equal to any 2009 monthly drop in absolute terms.

However, even if you back out the jump in inter-bank loans, commercial/corp lending still rose by $400 million; which is better than “a kick with a frozen boot” as my Paternal Grandfather would say.

MRM