Almost 10% of all loans granted repayment deferrals
Close to 10% of total outstanding loans, cumulatively worth $274 billion, have been granted temporary repayment deferrals by deposit-taking institutions (ADIs), according to data from the Australian Prudential Regulation Authority (APRA).
Of that, housing loans which stood at $195 billion made up the majority of temporary relief to borrowers impacted by COVID-19, which allowed borrowers to defer their loan repayments for a period of time.
At the same time, small business loans which accounted for $55 billion of all outstanding loans, showed a higher incidence of repayment deferral with 17% of small business loans being a subject to repayment deferral, compared to only 11% of housing loans.
According to APRA, an overall composition of loan repayment deferrals remained relatively stable with the most noticeable change being increased loans exiting from repayment deferral, from $2 billion in May to $18 billion in June and the majority of these loans returned to a performing status.
However, the housing risk profile showed that housing loans granted repayment deferrals were more likely to be extended to owner-occupier borrowers, subject to principal and interest repayments, and had higher loan to value ratios than all housing loans.
Source: APRA
AUTHOR
Oksana Patron
Recommended for you
The top five licensees are demonstrating a “strong recovery” from losses in the first half of the year, and the gap is narrowing between their respective adviser numbers.
With many advisers preparing to retire or sell up, business advisory firm Business Health believes advisers need to take a proactive approach to informing their clients of succession plans.
Retirement commentators have flagged that almost a third of Australians over 50 are unprepared for the longevity of retirement and are falling behind APAC peers in their preparations and advice engagement.
As private markets continue to garner investor interest, Netwealth’s series of private market reports have revealed how much advisers and wealth managers are allocating, as well as a growing attraction to evergreen funds.
