Ticking debt time bomb: How hundreds of thousands of customers at Australia’s largest banks are STILL not making mortgage repayments
- Commonwealth Bank chief revealed 300,000 calls to borrowers on repayments
- Matt Comyn told annual general meeting bank was ‘offering solutions tailored’
- Six-month loan repayment holidays ended in September but are being extended
Australia’s biggest bank has revealed it has made 300,000 calls to its borrowers who are still deferring their mortgages.
Commonwealth Bank chief executive Matt Comyn informed shareholders on Tuesday the effects of the coronavirus recession were far from over.
‘We also recognise that some Australians and businesses will continue to require support,’ he told a virtual annual general meeting.
‘Our teams have made more than 300,000 calls to customers with deferred loans to talk with them about their options.’
While 300,000 calls were made, 93,000 Commonwealth Bank loans remained deferred as September 2020.
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Commonwealth Bank chief executive Matt Comyn informed shareholders on Tuesday calls had been made to 300,000 borrowers who are still deferring their mortgages
In September, the Australian Banking Association announced 450,000 home and business borrowers would be contacted in coming months to determine if they could service their loans again, following six-month repayment holidays.
The big banks are now extending the deferrals until March 2021 if their customers can prove they can’t repay their mortgages.
‘For those customers who are facing financial hardship or need more support, we are offering solutions tailored to their individual needs,’ Mr Comyn said.
Nonetheless, he revealed the Commonwealth Bank’s mortgage deferral rate had plunged by almost 40 per cent from $67billion in June to $42billion in September.
National Australia Bank CEO Ross McEwan last month told a parliamentary hearing distressed borrowers weren’t picking up the phone.
In September, the Australian Banking Association announced 450,000 borrowers would be contacted in coming months to determine if they could service their loans again, following six-month repayment holidays
‘The thing that distresses me right now is, when we’re making calls to customers to check in, 20 per cent won’t pick the phone up or call back — even if we text, email and phone,’ he said.
A Commonwealth Bank video was also played at Tuesday’s AGM highlighting how Australia’s biggest home lender had allowed customers to defer their mortgages.
‘When COVID-19 struck, CommBank played a critical economic role deferring repayments to home and business loans which gave customers time to catch their breath,’ it said.
Despite Australia being in recession for the first time in 29 years, as a result of the COVID-19 shutdowns, the value of all home loans surged by a record 12.6 per cent in August.
Despite Australia being in recession for the first time in 29 years, as a result of the COVID-19 shutdowns, the value of all home loans surged by a record 12.6 per cent in August. Pictured is Melbourne’s Flinders Street station during the Stage Four lockdown in October
The value of owner-occupier mortgages climbed by 13.6 per cent during the month, producing an annual increase of 29.2 per cent, Australian Bureau of Statistics data released on Friday showed.
Craig James, the chief economist with the Commonwealth Bank’s online share trading arm CommSec, said borrowers were defying the economic gloom.
‘Recession? What recession? Aussies are embracing housing like never before,’ he said.
‘Not only have home loans posted record gains in July and August but the value of loans has never been higher.’