Domestic commercial bank lending jumps $7.5 billion in 2012
I haven’t been checking for a few weeks, so it came as a surprise to see that Canadian banks are almost back to their peak lending level of December 2008, according to Bank of Canada data. Between December 2011 and April 2012, banks put out $7.5 billion of net new commercial and corporate loans — a 4% increase, year-to-date. The category is “Business loans to Canadian residents for business purposes”:
December 2008: $191.563 billion
January 2009: $185.679 billion
February: $183.759 billion
March: $184.089 billion
April: $181.811 billion
May: $178.691 billion
June: $176.365 billion
July: $174.664 billion
August: $173.818 billion
September: $171.152 billion
October: $171.091 billion
November: $168.425 billion
December: $169.430 billion
January 2010: $167.892 billion
February: $168.104 billion
March: $169.495 billion
April: $169.163 billion
May: $166.378 billion
June: $165.369 billion
July: $166.988 billion
August: $164.774 billion
September: $163.976 billion
October: $168.401 billion
November: $168.892 billion
December: $169.170 billion
January 2011: $170.42 billion
February: $171.800 billion
March: $174.028 billion
April: $175.198 billion
May: $173.974 billion
June: $176.527 billion
July: $177.574 billion
August: $177.654 billion
September: $176.856 billion
October: $178.214 billion
November: $176.705 billion
December: $180.526 billion
January 2012: $180.5 billion
February: $182.7 billion
March: $185.3 billion
April: $188.0 billion
According to a research report from RBC Capital Markets, this should continue throughout the year:
Loan growth is likely to decline in mortgage and consumer lending but we expect the 2011 improvements in business lending growth to be maintained in 2012 and 2013. We believe that the proposed changes by OSFI around HELOCs (particularly limiting HELOC LTVs to 65%) will help reduce the rate of household credit growth, and that further changes in loan underwriting could be put in place by CMHC in an effort to reduce the pace of household credit growth, unless loan growth (currently ~6-7%) slows to a pace similar to disposable income growth (currently 2.5%). We expect growth in business lending to remain solid as the business investment cycle (which is highly correlated to business loan growth) continues to be positive. Short term fluctuations should be expected based on business confidence levels. We forecast 2-4% personal and mortgage loan growth for in 2012 and 2013, and 5-10% in business loan growth.
MRM
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