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
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
