Deferred loans continue to fall: bankers

Colin Brinsden, AAP Economics and Business Correspondent
·1-min read

Deferred loans to assist borrowers during the coronavirus pandemic have fallen almost 70 per cent since the peak earlier this year.

Australian Banking Association data shows the number of deferred loans has fallen below 300,000 compared to a peak of more than 900,000 loans, a majority of which were held by the nation's seven largest banks.

The association's CEO Anna Bligh said the data shows that the economic recovery is gathering pace.

"This is an encouraging sign that most Australians are through the worst," Ms Bligh said.

"Australian banks have played a major role in carrying the economic burden of the pandemic for their customers. The good news is that the majority are now bouncing back as they restart their loan repayments."

At their peak, deferred loans held by the seven largest banks amounted to more than $250 billion in June, but now stand at $86 billion.

Home loan deferrals by the seven largest banks are down to fewer than 145,000 as of November 4.

Total business loan deferrals have fallen to fewer than 73,000, while SME loan deferrals are down to just over 65,000.

The number of loans on hold is expected to fall further in coming weeks as more borrowers reach the end of their six-month deferrals.

"It's great to see a lower than expected number of people needing to extend their deferral period," Ms Bligh said.

But she emphasised banks are continuing to work directly with customers who are still in financial difficulty.

"Don't wait till you are in over your head, talk to your bank, they'll help you find a way through this," she said.

"Don't tough it out on your own."