St George benefited from the retail deposit flight to quality during 2008, boosting retail deposits by one fifth to $57 billion, as investors felt more secure lodging funds with major Australian banks.Cash investors chased yield, moving funds from low interest accounts to term deposits, which jumped 57 per cent to $23 billion, with growth strongest in the second half, climbing 32 per cent. The directsaver products also performed well, up 15 per cent to $9.1 billion.Transaction accounts increased three per cent to $18 billion, with savings falling five per cent to $554 million and investment accounts off nine per cent to $6.4 billion.Retail funding provides just over half of total retail funding and other borrowings at St George, but the percentage continues to trend down. In September 2007 retail deposits funded 54 per cent, 60 per cent a year earlier, with 62 per cent in 2005 and 63 per cent in 2004.The St George interstate growth lending business model, to diversify the bank away from the strong reliance on New South Wales, showed some signs of success in the year to September 2008.The bank added an economic cycle adjustment of $48 million to the collective provision component of its impairment expenses.The credit quality of the residential lending book remained strong.Residential past due 90-day loans were $227 million, compared to $176 million a year before.The bank said the loan to valuation ratio across the home loan portfolio remains less than 40 per cent, with new loans written during the year on average 74 per cent.Unsecured personal loan arrears actually decreased during the period from 1.9 per cent last year to 1.6 per cent this year, while credit card arrears remain stable.Total consumer loans fell 10 per cent to $6.9 billion, due to margin lending falling by a third to $2.1 billion. Personal loans increased eight per cent to $3.1 billion, with credit cards up 14 per cent to $1.7 billion.Commercial loans increased 30 per cent to $38 billion.