Almost 10% of all loans granted repayment deferrals
Close to 10% of total outstanding loans, cumulatively worth $274 billion, have been granted temporary repayment deferrals by deposit-taking institutions (ADIs), according to data from the Australian Prudential Regulation Authority (APRA).
Of that, housing loans which stood at $195 billion made up the majority of temporary relief to borrowers impacted by COVID-19, which allowed borrowers to defer their loan repayments for a period of time.
At the same time, small business loans which accounted for $55 billion of all outstanding loans, showed a higher incidence of repayment deferral with 17% of small business loans being a subject to repayment deferral, compared to only 11% of housing loans.
According to APRA, an overall composition of loan repayment deferrals remained relatively stable with the most noticeable change being increased loans exiting from repayment deferral, from $2 billion in May to $18 billion in June and the majority of these loans returned to a performing status.
However, the housing risk profile showed that housing loans granted repayment deferrals were more likely to be extended to owner-occupier borrowers, subject to principal and interest repayments, and had higher loan to value ratios than all housing loans.
Source: APRA
AUTHOR
Oksana Patron
Recommended for you
An adviser has received a written reprimand from the Financial Services and Credit Panel after failing to meet his CPD requirements, the panel’s first action since June.
AMP has reported a 61 per cent rise in inflows to its platform, with net cash flow passing $1 billion for the quarter, but superannuation fell back into outflows.
Those large AFSLs are among the groups experiencing the most adviser growth, indicating they are ready to expand following a period of transition and stabilisation after the Hayne royal commission.
The industry can expect to see more partnerships in the retirement income space in the future, enabling firms to progress their innovation, according to a panel.
