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VIC records highest loan deferrals

by Malavika Santhebennur5 minute read

Victoria has remained the state with the highest proportion of loans subject to deferrals among the states and territories, APRA data showed.

Figures released by the Australian Prudential Regulation Authority (APRA) on temporary loan repayment deferrals due to the coronavirus pandemic revealed that as at 30 November, 3.2 per cent of loans remain deferred in Victoria, compared with the rest of Australia at 1.7 per cent.

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Victoria led the states and territories in housing loan deferrals too, with 4 per cent of housing loans remaining deferred, compared with 3 per cent in NSW, 2 per cent in the Northern Territory, 2 per cent in Western Australia, 2 per cent in Queensland, 1 per cent in South Australia, 1 per cent in Tasmania, and 1 per cent in the ACT.

The state also recorded the highest level of SME loans still deferred, also at 4 per cent, compared with 3 per cent in NT, 2 per cent in Tasmania, WA, Queensland, NSW, and the ACT, and 1 per cent in South Australia.

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Overall, APRA figures revealed that a total of $60.3 billion worth of loans are on temporary repayment deferrals across Australia, which is around 2.3 per cent of total loans outstanding.

This is a decrease from October, when a total of $87.6 billion worth of loans were on temporary repayment deferrals, comprising around 3.3 per cent of total loans outstanding.

In September 2020, 6.7 per cent of total loans outstanding – or $179 billion worth of loans – were on temporary repayment deferrals, while in August 2020, 8.5 per cent of total loans outstanding – worth $229 billion – were on temporary repayment deferrals.

Exits from deferrals continued to outweigh new entries for the fifth straight month in November, with $32 billion in loans expiring or exiting deferrals, while $7 billion entered into deferrals or were extended.

As at 30 November, housing loans comprised the majority of total loans granted repayment deferrals, at $49.5 billion, or 2.8 per cent of total housing loans.

For the first time, in November 2020, housing loan deferrals had a higher incidence of repayment deferrals compared to small-to-medium enterprises (SME) loans.

SME loans subject to repayment deferrals comprised 2.4 per cent of total loans at $7.6 billion as at 30 November.

The largest share for SME deferrals as a share of total SME loans were ANZ and Bendigo and Adelaide Bank at 4 per cent, while the lowest was Macquarie Bank at 1 per cent.

The largest share for housing loan deferrals as a share of total housing loans were Westpac and ANZ at 4 per cent, while the lowest was National Australia Bank (NAB) at 1 per cent.

Data from the Australian Banking Association in November 2020 showed that the number of deferred loans fell below 300,000, down from the peak of more than 900,000 deferred loans, while the value of deferred loans dropped to below $100 billion.

[Related: Almost half of deferred loans resume payment: ABA]

VIC records highest loan deferrals
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Malavika Santhebennur

Malavika Santhebennur

AUTHOR

Malavika Santhebennur is a content specialist at Momentum Media, focusing on mortgages and finance writing.

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