Banks on standby to support customers facing financial pressure

Customers facing financial stress from ongoing cost pressures and higher loan repayments are being urged to get in touch with their bank if they need support.

ABA CEO Simon Birmingham said banks have a range of practical measures they can put in place to help customers navigate the current economic environment.

“Australian banks recognise that this week’s interest rate rise will be difficult news for many households and businesses,” Mr Birmingham said.  

“We know that for some households, cost of living pressures and higher repayments are creating a real squeeze on their budgets.

“Banks also understand that many businesses are facing financial pain amid the current global uncertainty which has led to higher fuel costs and supply chain disruptions.

“Whether you are a household or a business under financial pressure right now, you don’t have to tough it out on your own – get in touch with your bank.

“Banks have specialist teams ready to support customers across the country who may be struggling with a variety of challenges such as higher loan repayments, cost pressures or supply chain disruptions.

“These solutions for a household could include moving them onto interest-only payments and for a business it could include providing extra working capital assistance.”

Mr Birmingham also said continuing growth in deposits and high rates of customers still ahead on loan repayments was a sign of the resilience households had built up over the last few years.

“Despite the current economic headwinds, data shows over 80 per cent of mortgage holders are still ahead on their loan repayments and household deposits remain at record levels,” Mr Birmingham said.

“While many households remain in a relatively strong position in terms of repayments, financial situations can change quickly, and banks stand ready to support all their customers during these uncertain times.”

Depending on individual circumstances, assistance may include:

• Moving a customer to interest-only payments for a period.
• Deferring payments temporarily.
• Reducing or waiving fees for customers in hardship.
• Restructuring the length of a loan to lower monthly repayments.
• Providing flexible access to savings and term deposit products to support short term cash flow needs.
• Emergency credit limit increases or temporary overdrafts.

To find out more about how banks are supporting customers, visit the ABA’s Financial Assistance Hub.