Australian banks are lending out money at a faster rate than they are taking it in from deposits, forcing them to increasingly rely on international funding markets, rating agency Moody's warns.
Moody's says while deposits have grown at a faster rate than lending since the global financial crisis, the trend had reversed in 2014 as Australian households and businesses started to borrow more.
The agency said the gap between loans issued and deposits across the banking sector grew by $34 billion between December and July to hit $497 billion.
That means banks are having to look increasingly to international wholesale funding markets, and Moody's analyst Daniel Yu indicated further lending growth could have an impact on credit ratings.
"Given that Australian banks' structural reliance on wholesale funding markets remains a key credit sensitivity, how they manage their funding and liquidity, as credit growth picks up, will represent an important rating focus," he said.
But he said the increasing reliance on wholesale debt markets would be offset, at least in part, by banks' improving debt structures and increases in liquid assets.
The increase in lending comes amid a resurgence in Australia's property market, especially in Sydney, where prices have grown more than 17 per cent in the past year, according to figures from RP Data.
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