Professional Lending Services Market Size For Loans: The estimated amount of loans given to the professional business services industry in Australia is AUD 3.82 billion (about $2.60 billion).
TOTAL LOANS TO BUSINESSES IN AUSTRALIA
- The total lending value to businesses (seasonally adjusted) in Australia is AUD 31,833 million.
- The commercial finance value of the total lending to business value in Australia is AUD 31,261 million. Similarly, the total value in the lease finance category is AUD 572 million.
- No further segmentation of the loans has been provided by the Australian Bureau of Statistics (ABS) in any of the reports.
- Based on the calculations, the estimated amount of loans given to the professional business services industry in Australia is AUD 3.82 billion. The amount is equivalent to $2.6 billion.
HELPFUL FINDINGS AND STATISTICS
- There are 2.31 million businesses in Australia, and about 98% (2.3 million) of those businesses are small to medium businesses (SMEs).
- The industry with the largest number of businesses in Australia is construction (17%), followed by professional, scientific, and technical services (12%) and rental, hiring, and real estate services (11%).
- On average, 22.25% of all businesses in Australia (from small to large) sought business financing in between FY 2017 to 2018. Among those businesses, 34% had 200+ employees, 23% had 20-199 employees, 20% had 5-19 employees, and 12% had 0-4 employees.
- 90.5% of the total businesses that applied for loans or sought business financing received debt financing in Australia. 95% of the businesses with 200+ employees, 94% of the businesses with 20-199 employees, 87% of the businesses with 5-19 employees, and 86% of the businesses with 0-4 employees received debt finance.
- New credit cards, new bank overdrafts, new mortgage loans, and new capital/finance lease or hire-purchase agreements are the most common types of financing sought by businesses in Australia.
CALCULATIONS
- Total number of businesses in Australia = 2.31 million
- Number of businesses that have applied for loans = 2.31 million * 22.25% = 513,975
- Number of businesses that got loan approval = 513,975 * 90.50% = 465,148
- Average loan amount per company = AUD 31,833 million/465,148 = AUD 68,436
- Number of professional services companies = 2.31 million * 12% = 277,200
- Number of professional services that have applied for loans = 277,200 * 22.25% = 61,677
- Number of professional services that got loan approval = 61,677 * 90.50% = 55,818
Therefore, the estimated loan amount for professional services is equal to the product of the number of professional services companies that got loan approval and the average loan amount per company.
- Total loan amount for professional services = 55,818 * AUD 68,436 = AUD 3.82 billion.
Using the conversion factor (AUD 1 = $0.68), the total amount of loans can be converted to $2.6 billion.
Australian Professional Services Lending Market Size: Bank Deposits
As of June 2019, the total deposits reported in the Australian financial system were $2,015.0 billion, decreasing from $2,039.8 billion reported in March 2019. The average deposits have been $1,886.8 billion from September 2004 to June 2019, reaching an all-time high of $2,212.793 billion in March 2013 and a record low of $645.5 billion in September 2004. Below are our helpful findings, as well as our research strategy, to explain why the requested information could not be obtained.
THE AUSTRALIAN BANKING SYSTEM
- As per a report from IBIS World, the National and Regional Commercial/Business banking industry in Australia has witnessed an overall decline in industry revenues over the past five years with the same expected to decline at an annual rate of 0.3% over the five years through 2018-19, to reach $152.8 billion by the end of 2019.
- The decline has been due to low-interest rates making the cash rate to fall to a record low since August 2016 and remaining stagnant. This situation has forced Australian banks to increasingly rely on funding from retail deposits.
- The banking sector is the largest part of the Australian financial system and comprises 147 authorized deposit-taking institutions (ADIs), which “collectively hold around 55% of the assets of Australian financial institutions.”
- The four largest banks that are designated as ‘major banks’ in Australia include Australia and New Zealand Banking Group Limited (ANZ), the Commonwealth Bank of Australia (CMB), the National Australia Bank Limited (NAB), and Westpac Banking Corporation (WBC).
- These four major banks hold close to 75% of total assets held by ADIs in Australia, in spite of making up only 2.7% of the total number of ADIs in Australia.
- As of the September quarter 2017, deposits made up around 64% of liabilities held by Australian ADIs. On-call/demand deposits (such as transaction accounts) made up one-third of total liabilities, and term deposits and certificates of deposit made up a further 28%.
- Progressive deregulation and privatization are the key trends in the Australian banking sector, with foreign banks being allowed to enter the financial market and retail banks now providing a wider range of financial services.
AUSTRALIAN BANKS DEPOSIT DATA
- The total deposits reported in the Australian financial system were $2,015.0 billion as of June 2019 decreasing from the last reported number of $2,039.8 billion in March 2019. The average deposits have been $1,886.8 billion from September 2004 to June 2019, reaching an all-time high of $2,212.793 billion in March 2013 and a record low of $645.5 billion in Sep 2004.
- The Commonwealth Bank of Australia, which is among the four major banks in Australia, held A$635,300 million in deposits as of June 2019. The various types of deposits taken by the bank from customers included certificates of deposit, term deposits, savings deposits, and other demand deposits and debentures.
- As per a report from KPMG, owing to the increase in short term wholesale funding costs, Australian banks have been increasingly relying upon the customer deposits as a preferred source of funding, and have take steps to actively replace short-term wholesale funding with lower-cost long term wholesale funding.
- The above is corroborated by the fact that the proportion of deposits as a percentage of total gross loans has been on an uptick for all the major banks. For example for NAB, the same has grown from 64% in FY15 to 70% in FY18 while for WBC, the same has grown from 68% in FY15 to 73% in FY18.
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