Utilisation

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-01

// THE SHORT ANSWER

Utilisation is how much of a facility's limit is drawn — at a point in time, and as a curve across the year. A bank watches the curve more closely than any single balance: a seasonal line that rises and falls with the trade is doing its job; one that sits near its limit all year has become core debt; one that is never used is a commitment the bank holds capital against for nothing. Sustained changes in utilisation, in either direction, are among the first things raised at an annual review.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.