APRA data reveals SMEs doing it tougher on the loan deferral front

  • By AB+F Editorial

The latest monthly data from APRA has revealed that $274 billion worth of loans have been granted temporary repayment deferrals, which is close to 10 per cent of total loans outstanding. 

Housing loans make up the majority of total loans granted repayment deferrals, although small business loans have a higher incidence of repayment deferral with 17 per cent of small business loans subject to repayment deferral, compared with 11 per cent of housing loans.

The data is based on information sent to the prudential regulator by the banks. 

“It’s good news and bad news from APRA’s release today of loan repayment pause data,” Canstar’s Steve Mickenbecker said.

“The bad news is that 9 per cent  of home loans are temporarily deferred, which is a large group in financial stress. The good news is that the overwhelming majority, 91 per cent of home loans, have not needed their banks’ forbearance at this stage.”

The data is based on information sent to the prudential regulator by the banks. 

Overall, the composition of loan repayment deferrals remains relatively stable with the most noticeable change being increased loans exiting from repayment deferral, from $2 billion in May to $18 billion in June.

The majority of these loans have returned to a performing status. 

Here, Mickenbecker notes this is even “better news”. 

“A surprisingly early return to normality. Let’s hope that Victoria’s July slide back into COVID hasn’t reversed this.”

The housing risk profile shows that housing loans granted repayment deferrals are more likely to be extended to owner-occupier borrowers, subject to principal and interest repayments, and have higher loan to value ratios than all housing loans.

For Mickenbecker, with 17 per cent of loans temporarily deferred, “small business is doing it tougher than households, and the necessity of the further JobKeeper breathing space is confirmed.”