The loan deferral program devised by the Federal Government, the banks and the prudential regulator to get borrowers through the pandemic has been declared a success.
Just 0.5% of the loans deferred at the peak of the crisis remain frozen. The plan for banks to act as the nation’s “shock absorbers” by suspending repayments for some home-owners and small businesses ended on 31 March.
Australian Banking Association CEO Anna Bligh says the turnaround in numbers is a sign of the economy gaining momentum. “These figures reflect the impressive recovery Australia’s economy is experiencing after facing a one in 100-year pandemic,” she says. “The fact that unemployment is lower than expected and the economy has rebounded faster expected is great news.”
ABA data reveals that 854,606 loans were deferred across the big four banks and Suncorp. As of 31 March, just 4,569 loans remained frozen, including 508 small business loans and 3,170 home loans. Borrowers who remain in difficulty represent 0.5% of all deferred loans and 0.03% of all loans.
“Banks will continue to support those households and businesses still doing it tough this year, taking a fair and compassionate approach to get people through the pandemic,” Bligh says.