“Encouraging sign of recovery”: Just 9% of bank loan deferrals still outstanding

As automatic loan deferrals offered by Australia’s biggest banks come to an end, new figures show that 91 per cent of all loans that were deferred have resumed repayments.

According to the Australian Banking Association (ABA), data from Australia’s largest banks revealed that just 5 per cent of deferred business loans and 13 per cent of deferred housing loans are yet to resume repayments.

From the big four banks, 78,556 loans remain deferred. This is made up of 60,562 home loans, 11,263 business loans and a mixture of personal loans and credit cards.

This equates to just 0.5 per cent of all loans on the books of the four majors currently deferred, including 1.4 per cent of home loans and 0.7 per cent of all small business loans.

ABA chief executive Anna Bligh said that while this is an encouraging sign of recovery, it’s clear that there are still Australians who need assistance to get through the pandemic.

“Every customer is different,” Ms Bligh said. “Banks are taking a careful and measured approach that takes into account every customer’s individual circumstances.”

As more customers resume repayments, banks are working directly with those in hardship on an individual basis to find the right solution, according to the ABA.

The next phase of support will involve assistance from specialised hardship teams for customers who are unable to make reduced repayments or restructure their loans. It will also include a new online tool to guide customers and improve transparency.

“This is about ensuring that no customer is left in the dark as we emerge from the pandemic,” Ms Bligh said.

“It represents a compact between banks and their customers as we navigate the uncertain path ahead.”

According to Ms Bligh, customers can expect a thoughtful and compassionate approach, “with clear and transparent explanations, regardless of who they bank with”.

“This step-by-step guide will help customers navigate the path out of the pandemic,” she said.

The new Financial Assistance Hub was developed by banks in collaboration with consumer groups, including Financial Counselling Australia, the Rural Financial Counselling Service, the Australian Small Business and Family Enterprise Ombudsman, the Australian Financial Complaints Authority, and the Australian Securities & Investments Commission.

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