Banks launch new phase of pandemic support

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Australian banks are entering the next phase of COVID-19 support, as automatic loan deferrals come to an end and demand for extensions falls. 

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New data from Australia’s largest banks shows that 91% of deferred loans have resumed repayments. Just 5% of deferred business loans and 13% of deferred housing loans are yet to resume repayments. 

While this is an encouraging sign of recovery, it’s clear that there are still Australians who need assistance to get through the pandemic. 

“Every customer is different. Banks are taking a careful and measured approach that takes into account every customer’s individual circumstances”, said Australian Banking Association CEO, Anna Bligh.

As more customers resume repayments, banks are working directly with those in hardship on an individual basis to find the right solution. 

The next phase of support will involve assistance from specialised hardship teams for customers who are unable to make reduced repayments or restructure their loans. 

“This step-by-step guide will help customers navigate the path out of the pandemic.”

ABA CEO Anna Bligh

These expanded teams have extensive experience working with customers in financial difficulty due to the loss of a job, a relationship breakdown or many other common causes of financial difficulty. 

As part of this support, banks have developed an industry-wide, consistent approach to hardship and a new online tool to guide customers in financial hardship and improve transparency. 

“This is about ensuring that no customer is left in the dark as we emerge from the pandemic. It represents a compact between banks and their customers as we navigate the uncertain path ahead”, Ms Bligh said.

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“Customers can expect a thoughtful and compassionate approach, with clear and transparent explanations, regardless of who they bank with. This step-by-step guide will help customers navigate the path out of the pandemic.” 

As deferrals and government support measures wind down, banks are reassuring their customers that continued tailored support is available to those who are still struggling. 

“Australian banks will continue to help customers and businesses turn the corner after the pandemic, while providing a fair and compassionate approach to those who can’t get back on their feet”, Ms Bligh said.

The new Financial Assistance Hub can be found at dev2.ausbanking.ds1.pensoagency.com/assistance 

Banks developed the site in collaboration with consumer groups including Financial Counselling Australia and the Rural Financial Counselling Service, as well as the Australian Small Business and Family Enterprise Ombudsman, the Australian Financial Complaints Authority and the Australian Securities and Investments Commission. 

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Loan Deferral Statistics 

At the peak of loan deferrals in June 2020, Australia’s banks had deferred almost one million loans.  

At January 31, total outstanding deferrals are just 9% of all loans that were deferred.  

Just 5% of small business loans remain deferred and 13% of housing loans.   

From the four major banks, 78,556 loans remain deferred. 60,562 are housing loans, 11,263 are business loans, and the remainder are a mixture of personal loans and credit cards.

On the books of the 4 majors, just 0.7 % of all small business loans, 1.4% of housing loans, and 0.5% of all loans are currently deferred. 

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COVID 19covid-19 supportdeferred loan repaymantsfinancial assistancefinancial assistance hub