COVID-19 Banking Timeline: a detailed financial history of the pandemic.
“The strength of Australia’s banks has allowed the industry to step up and play a key role in helping, not only our customers, but supporting the recovery of the Australian economy, through one of the most challenging periods in our lifetimes”ABA CEO Anna Bligh
Australian Banks offer a range of assistance for customers impacted by the economic impacts of the COVID-19 pandemic. These include:
Business banking repayment deferrals
- Up to 3 month repayment deferrals, with loan terms extended accordingly
- Offered to all small business customers (business lending less than $3m and a turnover of less than $5m), which includes up to 98% of small businesses
- Only for loans in good standing (i.e. repayments up to date or engaged in a payment program with their bank)
Everyday banking support
- Refunds of merchant terminal fees for up to 3 months
- Waiving of fees and notice periods on Cash Deposit and Farm Management Deposit accounts for up to 3 months
Home loan support
- Range of support measures, including deferrals on a month by month basis
- Available to both individual and business customers
Australian banks were in a strong position to act as shock absorbers for customers during the COVID-19 pandemic.
In concert with regulators and governments, banks acted to support a million Australians by deferring repayments on loans across households and businesses. This was possible due to the strong financial position of the Australian banking sector which enabled banks to focus on customers with the goal of ensuring no customer was left behind when the pandemic hit in early 2020.
99% have now resumed repayments
With the deferral period now over, more than 99% of deferred loans have resumed repayments. Fewer than 5000 homeowners and small businesses remained on deferred loans at the end of the scheme on March 31 2021 and banks are engaging directly with their customers who are still affected by the ongoing pandemic and related border closures. To ensure these customers continue to be supported, banks have increased staff numbers in their hardship teams and released an online step by step guide detailing the options available to customers in financial difficulty.
$280 billion to business during COVID-19
Ensuring the continued flow of credit during the pandemic was also a key focus of Australia’s banks. Lending continued during the pandemic, including $280 billion to businesses across Australia. Access to finance through the Government’s SME Lending Guarantee and an increase in asset finance lending, taking account of the Governments accelerated depreciation policy, has also assisted banks to maintain the flow of credit.
“Bank call centres have been, and continue to be, inundated with people needing help. Many of these people have never had to ask for assistance before in their lives and may never again. I would strongly urge anyone who needs support to contact their bank.”ABA CEO Anna Bligh
Credit reporting was improved dramatically for customers impacted by COVID-19
“The loan deferral measure offered to customers by Australia’s banks has led to the largest ever customer contact process in the industry’s history, with an additional 5000 new or redeployed staff working to ensure customers understand their options.”ABA CEO Anna Bligh
Debit Card Delivery
Prior to COVID-19, there were over half a million Australian bank customers who actively used a passbook account or transaction account with no linked debit card, with many of these being customers over 70 years of age. This means they paid for goods and services using cash or EFTPOS but were unable to shop online or over the phone. The ABA coordinated a debit card rollout with member banks to ensure that customers that were isolating or in quarantine had the option to use them.
“The industry has recognised that as a result of the Government’s social distancing advice, particularly for older Australians, we must provide additional options for people to do their banking and pay for goods and services”ABA CEO Anna Bligh
“I’m very pleased to say that we’ve now seen almost 90 per cent of those people, the 900,000 Australians who deferred their loan repayments, now back making those payments.”ABA CEO Anna Bligh
COVID-19: ABA Updates
More than 57,000 customers have received hardship assistance during recent lockdowns across Australia.
“This is an important loan scheme that’s helping Australian businesses fight their way through the pandemic,”
Since 8 July 2021, more than 14,500 home loans have been deferred, while more than 600 business loans have been deferred.
“customers can rest assured that their bank will have their back”
“The message from banks is clear: don’t tough it out on your own. Call your bank. They will do whatever they can to help.”
“Over the past year, banks have cushioned the blow for their customers. Through 2021, their priority is helping customers rebuild and get ahead”
“This is the right product for the times. It includes more flexibility, and will allow small businesses to re-stock, rebuild and recover”, said ABA CEO, Anna Bligh.
Banks have developed an industry-wide, consistent approach to hardship and a new online tool to guide customers.
“…banks can go back to their normal processes and that is working out what’s right for every single customer, on an individual tailored basis with a proper assessment. That is the best thing for the customer.”
Interviewed by AM’s Peter Ryan, ABA CEO Anna Bligh talked about the substantial drop in loan deferrals since their peak during the pandemic, falling from 900,000 to 300,000.