Uptake of business loans soars

The uptake of business loans by Australian firms reached a three-year high in May, new figures have indicated.

According to the Australian Prudential Regulation Authority, growth in lending to non-financial organisations went up by 7.2 per cent when compared with the corresponding month in 2011, Dow Jones Newswires reports.

This also represented a one per cent hike on figures for April 2012.

Out of the nation's "big four" lenders, only the Commonwealth Bank saw its share of the business market fall, while Westpac, National Australia Bank and ANZ all made gains.

However, Goldman analyst Ben Koo told the news provider that people should not get too carried away with the upturn and he feels it does not signal a "sustained turnaround in business lending".

His comments come shortly after the Sydney Morning Herald reported that European banks have significantly scaled back the number of corporate loans being issued down under.

Barclays economist Kieran Davies said European institutions have reduced their business lending in Australia by 30 per cent since 2009.

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