Coronavirus: Australian Banking Association data shows two-thirds of loans deferred during pandemic restarted

Australia’s economy recovery is gathering pace, with two-thirds of all loans deferred now being paid back in full. Data from the Australian Banking Association reveals that the number of deferred loans has fallen below 300,000 — a reduction of almost 70 per cent since the peak earlier this year. At the height of the pandemic, more than 900,000 loans were deferred by Australian banks. According to the latest data, up to November 4, home loan deferrals by the seven biggest banks are down to fewer than 145,000. Total business loan deferrals have fallen to fewer than 73,000 and SME loan deferrals are down to just over 65,000. Australian Banking Association chief executive Anna Bligh said the figures were an “encouraging sign that most Australians are through the worst”. “Australian banks have played a major role in carrying the economic burden of the pandemic for their customers,” she said. “The good news is that the majority are now bouncing back as they restart their loan repayments.” However she said if people were still in financial distress their bank would help them out. “Don’t wait till you are in over your head, talk to your bank, they’ll help you find a way through this. Don’t tough it out on your own”, Ms Bligh said. The value of deferred loans by the seven largest banks has now fallen to $86 billion from the June peak of more than $250 billion. Treasurer Josh Frydenberg said “Australia’s economic recovery is well under way” but shadow treasurer Jim Chalmers said while the loan deferral figures were good, the country was not out of the woods. “This improvement in the number of borrowers using loan deferrals is welcome, but it is clear that many Australians are still experiencing extreme financial hardship,” Dr Chalmers said. “With loan deferral deadlines approaching for many customers, banks must be flexible with their transition arrangements to support vulnerable borrowers, businesses, families and communities.” The Federal Government is slowly turning off its economic support with the scaling back of JobKeeper. The JobSeeker coronavirus supplement has been extended through to March. Next month the Mid-Year Economic and Fiscal Outlook will be released which will also give a better indication of the state of the Federal Budget and economic recovery.