Evil Anna: Banks to tighten the screw

Via Evil Anna:

Australia’s banks supported their customers as the country entered the COVID-19 pandemic and they continue to support them on the way out.

As the initial wave of 6-month loan payment deferrals come to an end, banks have begun to contact customers for their 6-month assessment and to discuss the next stage of support and assistance.


Of the more than 900,000 loans which have been deferred across the pandemic, at least 450,000 loan deferral customers will be assessed in coming weeks as they approach the end of their deferral in September and October.

These include 105,000 business loan deferrals to small and medium businesses, of which 65,000 will be assessed by the end of September, and 40,000 by the end of October. 260,000 mortgages are also due to be assessed, 80,000 by end of September and 180,000 by end of October.

ABA CEO Anna Bligh said, “The loan deferral measure offered to customers by Australia’s banks has led to the largest ever customer contact process in the industry’s history, with an additional 5000 new or redeployed staff working to ensure customers understand their options”

The next steps presented to customers during these assessment calls will include:

  • Those who can resume repayments at the end of their deferral, will be required to do so
  • Those still in difficulty, will work with their bank to restructure or vary their loan, including converting to interest only payments for a period of time, or extending the term of the loan
  • Following the assessment once the bank understands the customers circumstances, in some cases, a further 4-month deferral may be granted, but this will not be automatic
  • Customers who will be unable to pay their loan over the longer term will be offered tailored assistance that addresses their needs

ABA CEO Anna Bligh said, “Customers know what’s best for them. It’s the bank’s job to set out all the options and implications and ensure customers have the information and the time to make the right decision to suit their needs.”

Of the 900,000 loans that have had payments deferred, 13% had already resumed repayments by the end of July.  Some banks have estimated that an additional 100,000 people began resuming payments in the month of August.

Ms Bligh continued, “As customers who are able to begin their repayments again, it allows banks to focus their support on those who really need it.”

Data above: ANZ, CBA, WBC, NAB, Bendigo, Bank of Queensland, Suncorp 


Covid deferrals: facts and figures – as at July 31 2020

  • In July, 81,000 deferred loans, worth $22.4 billion, resumed repayments.
  • By the end of July, 109,000 loan deferrals worth $41 billion had resumed repayments (around one in seven of total deferrals).
  • Overall, more than double the amount of deferred mortgages have resumed repayments (80,000) than deferred small business loans (38,000).
  • One in five of all remaining outstanding loans were receiving full (13%) or partial (7%) repayments.
  • Of remaining outstanding small business loans, one in five (22%) were making full repayments and one in twenty (5%) making partial repayments.
  • Customers with deferred mortgages are also continuing to make full (11%) or partial (9%) repayments.

Bankruptcy with a smile. The seventh level of hell awaits those who sell-out to banking.

Martin North discusses on the ABC:

David Llewellyn-Smith
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Comments

  1. An excellent framing of it by Ms Bligh:

    “Customers know what’s best for them. It’s the bank’s job to set out all the options and implications….”

    Customers will always opt to play Russian Roulette with the housing and employment market, particularly for the family home. Meanwhile the Bank gets to decide how many chambers to fill & leave empty…I suspect as time goes on they’ll be handing many a fully loaded six-shooter.

    • Our politicians confiscated the revolver when the CBA and State banks were privatised. The Australian banking cartel now provides their customers only with automatics to play Russian Roulette with – it’s much more efficient. The RBA will even load the magazine for you. Keep paying the debt until you’ve had enough and then quickly euthanise yourself for the sake of “the economy”. And if you don’t mind, buy your own black plastic from Bunnings and put it on the walls before you do. We don’t want to devalue your property value with slashed brains on Gyprock.

      If you’d like to hear details of our privacy policy….

  2. The banks can’t afford to continue deferrals unless ASIC exempts them from capital requirements – I am not sure when the current ASIC exemption expires but instead of holding ~1.5% capital against a deferred loan they would need ~60+% capital on a deferred loan.

    I am sure the govt is working on that but in its absence it is times up for those that can’t defer.

  3. ‘Customers who will be unable to pay their loan over the longer term will be offered tailored assistance that addresses their needs’
    What does that mean? Does it mean, ‘orderly’ sell off? Or does it mean that they will pass thes loans into the SPV’s for bad debts and then sell them to the govt, so that the homeowner gets to live there still without paying?

        • Was not the point I was making. Banks will get you to borrow money from friends and family for you to pay the bank on the implied promise that they wont reposess at that point giving you or you business time to get back on you feet. What mostly happens in practice is that as soon as they get this sum of money, they repossess anyway leaving you in a bigger mess than you were. ie they are not to be trusted and you as a human being will have destroyed your friends and families trust in you. This happened to a good freind of mine who helped his brother out to the tune of half of his savings which 10 years later is still not payed back thanks to his brothers bankruptcy, a decent hard working truck driver who had been shafted on a big contact he took on. A viable business was destroyed.

  4. Totes BeWokeMEMBER

    How did this disaster occur? Privatisation of banking.

    Who sold the Commonwealth Bank?

    Keating’s Labor.

    Labor right there at the very core of every problem we’ve got.

    How could it be made worse?

    Let Wong lower FIRB $50m to $15m and sell all of Australia’s farmland to China.

  5. Forrest GumpMEMBER

    I have a question:

    How can someone determine if an overseas investor has obtained FIRB approval for purchasing land and houses in Australia? Is there a register somewhere?

  6. Ukraine fnMEMBER

    That picture of Anna looks like my mother in-law after I tell her for the fourth week in a row her Crumpets are unavailable from her online shopping order..

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