Deferred loans drop by near 70% from pandemic peak
Deferred loans have fallen by almost 70%, according to the Australian Banking Association (ABA), since the peak earlier this year.
At the peak of the COVID-19 pandemic in June, more than 900,000 loans were deferred by Australian banks, including 803,000 by the seven largest banks.
This represented more than $250 billion, a figure that had since reduced to $86 billion.
There were fewer than 145,000 home loans, business loan deferrals had fallen to fewer than 73,000, and small and medium sized enterprise (SME) loan deferrals were just over 65,000.
It was expected to fall further in the coming weeks as more loans reached the end of their six-month deferral period.
The move was described as an “encouraging sign” by ABA chief executive, Anna Bligh, that the economic recovery was gathering pace.
“Australian banks have played a major role in carrying the economic burden of the pandemic for their customers,” Bligh said.
“The good news is that the majority are now bouncing back as they restart their loan repayments.
“Don’t wait till you are in over your head, talk to your bank, they’ll help you find a way through this. Don’t tough it out on your own.”
Table 1: Loan Deferrals
|
|
June 24, 2020 |
November 4, 2020 |
% change |
|
Business loan deferrals |
228,070 |
72,909 |
-68% |
|
Of these: SME deferrals |
198,262 |
65,599 |
-67% |
|
Mortgage loan deferrals |
493,440 |
169,677 |
-66% |
|
Of these: Home loans |
436,139 |
145,250 |
-67% |
|
Total |
803,281 |
280,158 |
-65% |
Source: CBA, Westpac, NAB, ANZ, BOQ, Suncorp & Bendigo
Bligh said banks continued to work directly with customers who are still in financial difficulty.
“It’s great to see a lower than expected number of people needing to extend their deferral period,” Bligh said.
Graph: Value of loan deferrals 29 April - 4 November 2020
AUTHOR
Laura Dew
Recommended for you
Net cash flow on AMP’s platforms saw a substantial jump in the last quarter to $740 million, while its new digital advice offering boosted flows to superannuation and investment.
Insignia Financial has provided an update on the status of its private equity bidders as an initial six-week due diligence period comes to an end.
A judge has detailed how individuals lent as much as $1.1 million each to former financial adviser Anthony Del Vecchio, only learning when they contacted his employer that nothing had ever been invested.
Having rejected the possibility of an IPO, Mason Stevens’ CEO details why the wealth platform went down the PE route and how it intends to accelerate its growth ambitions in financial advice.
