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Banks freeze $6.8bn in loans

by Reporter4 minute read

Australia’s banking sector has collectively deferred over half a million loans valued at approximately $6.8 billion, new data from the ABA has revealed.

The Australian Banking Association (ABA) has published new data, revealing that its members have provided six-month loan repayment deferrals to more than half a million customers impacted by the COVID-19 crisis.  

This includes approximately 320,000 mortgage customers, 170,000 business owners and almost 37,000 personal loan and credit card customers.

In value terms, this represents approximately $6.8 billion.

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The ABA data revealed that in addition to repayment relief, member banks have issued $45 billion in new loans and $6 billion in top-ups to businesses.

Reflecting on the figures, ABA CEO Anna Bligh commented: “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.”

Ms Bligh stressed that the banking sector would play a vital role in supporting a broader economic recovery.

“The actions of banks will help inject much-needed investment into the economy, with the deferrals, new lending and increased credit allowing people and businesses to spend on the things they need,” she said.

Australia is in an enviable position; our banks are the most stable and some of the strongest in the world.
 
“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.”

This comes just a week after Prime Minister Scott Morrison urged the banking sector to “step up the mark” and reduce lags in the processing of credit applications.

“We need those turnaround times to improve,” he said, noting that many banks will already know the small-business customers applying for the finance (suggesting that processing should be taking less time than it is).

“These banks know these businesses… So, they know their history. They know their trading performance. They know what they’re capable of doing.”

He added: “They have to stand by these businesses in their time of greatest need… and that is now.”

[Related: PM calls on banks to address finance lags]

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