Delta loan deferrals slender, so far

Ian Rogers

Appeals from owners to banks for deferrals on business loans is beginning to bulge, with application numbers up by 108 per cent this week.

The rise in the need for deferrals on business loans last week was 93 per cent - but the actual levels of loan deferrals of all types for now looks puny.

All of 615 business loans have been deferred, a level certain to skyrocket with the commercial heartland of the country now all in lockdown.

Since 8 July 2021, more than 14,500 home loans have been deferred, the ABA said this morning. Its data is drawn from the five biggest banks.

“Comparatively, during the peak of the crisis in 2020, almost 500,000 home loans and more than 225,000 business loans were deferred,” the ABA said.

Anna Bligh, Chief Executive Officer of the Australian Banking Association reminded borrowers not to tough it out on their own.

Hardship approvals and loan deferrals are heavily skewed toward NSW residents, and “banks report many calls for assistance in NSW came from business and families affected by the recent shutdown of the construction industry,” the ABA said.

NSW home loan deferrals account for more than two thirds of total deferrals, while almost 80 per cent of deferred business loans are also from NSW.

APRA will soon shoulder the burden of more thoroughly reporting and analysing data on loan deferrals, with a snap industry consultation on protocols and the prudential treatment that will apply to loans that are granted a repayment deferral of up to three months on or before 31 August 2021 ending today.