Via the excellent Jonathon Mott at UBS:
Direct exposure to small businesses – 18% of SME book in deferral
Limited disclosure is available breaking down the 220,000 business loans (total ~$60bn) that are currently on loan repayment deferral until Sept/Oct (or Mar-21). ANZ and WBC provided a broad industry breakdown of their deferred business loans, showing their largest exposures are to: property; business services; retail; hospitality; and construction. However, these loans are far from homogeneous, making broad-brush analysis of potential losses very challenging. While the banks took economic overlays at the 1H20 results, ANZ disclosed a Collective Provision top-up of just 3.3% of its deferred business loans, equivalent to just 46bps of its SME & business banking books (ex-Insto). While these books have security, foreclosure en masse is not a straight forward process.
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