Lending to SMEs is set to slow compared to larger businesses in the year ahead, a senior bank executive says.
Westpac business financial services executive Peter Hanlon says the growth of lending to businesses with revenue less than $100 million is likely to ease back from rates of around 15% achieved in recent years, The Australian Financial Review reports.
Hanlon says that SME lending in Queensland and Western Australia has grown strongly compared to NSW and Victoria.
However, Hanlon says, overall SME credit growth remains healthy, especially in the booming mining services sector, according to the report.
“We are quite confident that over the next 12 months while credit growth will tail off a little bit, just because it’s been at quite significant highs compared to the last five to 10 years, it will only tail off a little bit,” Hanlon says.
The comment follow a speech by Reserve Bank of Australia deputy governor Ric Battelino yesterday in which it was revealed that consumer borrowing has grown at a much faster pace than business borrowing in recent years.
SmartCompany called NAB, St George and ANZ banks for a comment but none responded before publication.