Deferred loans dip below 2 per cent: APRA

Data from the Australian Prudential Regulation Authority (APRA) on temporary loan repayment deferrals due to the coronavirus pandemic has shown that as at 31 December 2020, a total of $51 billion worth of loans are on temporary repayment deferrals, which is around 1.9 per cent of total loans outstanding.

This has decreased from November 2020, when 2.3 per cent – or $60.3 billion – worth of loans were on deferrals across Australia.

Housing loans have continued to make up the majority of total loans granted repayment deferrals, with 2.4 per cent of total loans subject to deferrals, totalling $42.9 billion.

On the other hand, small-to-medium enterprise (SME) loans subject to repayment deferrals have totalled $6.0 billion, comprising 1.9 per cent of housing loans.

The APRA figures have also shown that exits from deferrals continued to outweigh new entries for the sixth straight month in December 2020, with $12 billion in loans expiring or exiting deferrals, and $3 billion entering or being extended.

This is down from $7 billion in loans that were approved for deferral and $32 billion of loans expiring or exiting from deferral in November 2020.

Victoria has remained the state with the highest proportion of loans subject to deferral eligible for capital concession among the states and territories, with 2.8 per cent of loans deferred, compared with the rest of the country at 1.4 per cent.

As at 31 December, 3 per cent of housing loans were on deferral in Victoria, compared with 2 per cent in NSW, Northern Territory, Western Australia and Queensland, and 1 per cent in South Australia, Tasmania and the ACT.

Victoria also recorded the highest number of SME loan deferrals, comprising 3 per cent of all SME loans, while the Northern Territory has 2 per cent of its SME loans on deferrals. A total of 1 per cent of all SME loans have remained in deferral in all other states and territories.

Among the largest authorised deposit-taking institutions (ADI) with loans subject to repayment deferrals, Westpac and ANZ had the largest share at 3 per cent, while the National Australia Bank (NAB) had the lowest share at 1 per cent.

NAB had recorded the largest movement in expired or exited deferrals at 48 per cent in December 2020, while the Westpac had recorded the largest movement in new or extended deferrals at 8 per cent.

The largest share for SME loan deferrals were Westpac and ANZ at 3 per cent while the lowest share was NAB at 1 per cent.

The largest share for housing was Westpac at 4 per cent, while the lowest was NAB at 1 per cent.

NAB recently confirmed that it had stopped accepting new mortgage deferral applications from 20 January 2021, to allow for two-month deferrals finishing at the end of March.

[Related: Don’t use deferrals to ‘hide problem loans’: RBA]

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.