Lending by the financial business sector continued to rise in the June 2021 quarter, following strong rises in the two previous quarters, Stats NZ said today.
The sector includes registered banks, the Reserve Bank of New Zealand (RBNZ), and other deposit takers, insurers, and pension and investment funds.
Of the $27.8 billion rise in the total financial assets of the financial business sector, loans rose $11.0 billion.
"This growth was mainly from loans made by registered banks, and was mostly driven by increased lending to households for residential mortgages, with a smaller rise in lending to non-financial businesses," national accounts senior manager Paul Pascoe said.
In addition, the sector also increased its debt security assets, like bonds. The main factor in the increase was the RBNZ continuing to increase its holdings of New Zealand government debt securities. The size of the Bank's Large Scale Asset Purchase (LSAP) programme has been significantly lower in recent quarters compared with its peak in the June 2020 quarter. In July 2021, the RBNZ announced that it would halt additional asset purchases under the LSAP programme.
| Quarter | Loans assets | Currency and deposits liabilities | Debt securities liabilities |
| Jun-16 | 4.96384E+11 | 3.20125E+11 | 1.978E+11 |
| Sep-16 | 4.9914E+11 | 3.22846E+11 | 2.00186E+11 |
| Dec-16 | 5.06347E+11 | 3.28242E+11 | 2.07051E+11 |
| Mar-17 | 5.10827E+11 | 3.33529E+11 | 1.95418E+11 |
| Jun-17 | 5.18432E+11 | 3.37092E+11 | 1.93666E+11 |
| Sep-17 | 5.2563E+11 | 3.40967E+11 | 2.03543E+11 |
| Dec-17 | 5.33142E+11 | 3.50609E+11 | 2.04857E+11 |
| Mar-18 | 5.39399E+11 | 3.57417E+11 | 2.00269E+11 |
| Jun-18 | 5.47749E+11 | 3.64609E+11 | 2.15757E+11 |
| Sep-18 | 5.53168E+11 | 3.64418E+11 | 2.10877E+11 |
| Dec-18 | 5.56722E+11 | 3.7323E+11 | 2.16937E+11 |
| Mar-19 | 5.6843E+11 | 3.72622E+11 | 2.21587E+11 |
| Jun-19 | 5.77914E+11 | 3.78303E+11 | 2.2177E+11 |
| Sep-19 | 5.84133E+11 | 3.8276E+11 | 2.35931E+11 |
| Dec-19 | 5.87839E+11 | 3.86587E+11 | 2.28673E+11 |
| Mar-20 | 6.05717E+11 | 4.15829E+11 | 2.5384E+11 |
| Jun-20 | 5.99984E+11 | 4.38854E+11 | 2.32963E+11 |
| Sep-20 | 5.94191E+11 | 4.5298E+11 | 2.2247E+11 |
| Dec-20 | 6.02639E+11 | 4.74529E+11 | 2.22922E+11 |
| Mar-21 | 6.13649E+11 | 4.82113E+11 | 2.29164E+11 |
| Jun-21 | 6.24607E+11 | 4.84979E+11 | 2.4109E+11 |
The financial business sector's liabilities were $28.3 billion (2.0 percent) higher at 30 June 2021 compared with 31 March 2021. The sector's main liabilities are in the form of deposits, which increased 0.6 percent during the June 2021 quarter. Most of the sector's deposits are at registered banks, with a significant contribution from the RBNZ accepting deposits from central government and registered banks.
Deposits at banks at 30 June 2021 are at about the same level as at 31 December 2020. Growth in deposits has levelled off in the first two quarters of this year compared with the strong growth over the 2020 calendar year. With deposit growth levelling off, and to support lending growth, the sector increased its debt security liabilities in the June 2021 quarter. New Zealand banks were the main contributor, and overseas lenders were the main investors in these bonds.
