APRA snaps at mortgage and SME loan quality

Ian Rogers

Deferred home loans total A$266 billion, or 10 per cent of the $2.6 trillion combined mortgage book of the 20 largest banks and ADIs.

Four months into the pandemic, APRA has for the first time published data on the temporary relief by banks to borrowers impacted by COVID-19, allowing them to defer loan repayments for a period of time.

Small business loans under forbearance represent $56 billion, of 18 per cent of $311 billion in aggregate lending to the sector.

The rate of increase in loans now subject to repayment deferrals between April and May “has slowed as applications reduced in May, and some ADIs continue to work through processing high volumes of applications received in April,” APRA said yesterday.

“The pace at which loans become subject to repayment deferrals will be dependent upon a number of factors. The reduction from April to May does not necessarily indicate a trend.”

The data is fluid and its reliability questionable.

“The temporary repayment deferral programs were implemented within tight timeframes and the data has been submitted to APRA on a best endeavours basis,” APRA said.

“As ADIs improve their ability to capture these data items, resubmissions are expected.

“APRA will continue to publish this aggregate information on a monthly basis until loans subject to repayment deferrals are no longer a notable component of the ADI industry’s total loan portfolio.”