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One year on: banks ready to support customers as more resume repayments

17 March 2021

97% of all deferred loans had resumed repayments by the end of February

Latest data shows that almost 97% of all deferred loans had resumed repayments by the end of February, almost one year on from the start of the key support measure to help Australians through the COVID-19 crisis.

The Australian Banking Association figures confirm that more customers are getting back on their feet.

“Over the past year, banks have cushioned the blow for their customers. Through 2021, their priority is helping customers rebuild and get ahead”, said ABA CEO Anna Bligh.

Australia’s banks are marking one year since lockdown and loan deferrals began. The key priorities for banks in 2021 will now turn to supporting those customers still experiencing financial difficulty, assisting the nation’s economic recovery and ensuring that credit flows into a recovering economy. Bank chief executives will discuss these issues when they meet in Canberra on Wednesday for the quarterly ABA Council meeting.

“Over the past year, banks have cushioned the blow for their customers. Through 2021, their priority is helping customers rebuild and get ahead”

ABA CEO Anna Bligh.

A year on from the first COVID-19 lockdowns, the quarterly ABA Council meeting provides an opportunity for bank leaders to meet Treasurer Josh Frydenberg and Shadow Treasurer Jim Chalmers to discuss the outlook for the year ahead and the role banks can play in building the economic recovery.

Banks will also discuss cyber security, anti-money laundering priorities, and receive briefings on Australia’s current security environment from key federal government agencies.

2020 saw significant bank assistance

2020 saw the rollout of significant assistance to help customers survive financial downsides of the pandemic.

Support provided so far has included;

  • Loan deferrals on almost one million loans
  • Landlord and tenant support
  • Credit rating protection
  • Establishing the Financial Assistance Hub at ausbanking.org.au/assistance
  • More than 350,000 waivers of merchant fees worth $42 million
  • Waivers of nearly 27,000 term deposit break fees worth $1.4 million

“Wednesday’s meeting is an opportunity to ensure that all banks are pulling in the same direction in the interests of their customers and the Australian economy”, said ABA CEO Anna Bligh.

“The latest loan deferral figures show that while the vast majority are back on their feet, some customers are still struggling. These customers should talk to their bank now about the path ahead. Banks are ready to take the call.”

Loan Deferrals

The latest loan deferral figures from the major banks reveal that as of February 28, total outstanding deferrals are just 3.5% of all loans that were deferred.

Just 1.2% of small business loans remain deferred and 5% of housing loans.

On the books of the 4 majors, just 0.2 % of all small business loans, 0.5% of housing loans, and 0.2% of all loan facilities remain deferred.

Table 1: Repayment deferrals requested & outstanding, February 28, 2021

 Small BusinessHousingTotal
Total repayment deferrals requested to date234,270448,864832,592
Repayment deferral loans outstanding2,80322,48028,924
Approved repayment deferrals credit outstanding relative to all deferred loans1.2%5.0%3.5%
Approved repayment deferrals credit outstanding relative to all loans0.2%0.5%0.2%
Source: 4 majors – APRA form 923.2

2020: a year like no other

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