Bank loans stay steady

Bank lending to households, businesses and farms grew just 0.2 per cent or $500 million last month.

Compared with May last year the stock of loans was unchanged at $301.1 billion, according to figures from the Reserve Bank yesterday.

A reduction in borrowing, relative to income, was helping to put the economy's expansion on a more sustainable footing, said ANZ chief economist Cameron Bagrie.

A continuation of that trend was one of the key assumptions the Reserve Bank had made in its June monetary policy statement.

Business lending was up 0.2 per cent on April but still down 7.6 per cent on May last year and nearly 10 per cent from its peak in January 2009.