Big four and non-major banks have expanded on their existing COVID support measures, as the NSW government declared stricter lockdown measures on Friday (9 July), including limiting Sydney residents’ movements to a 10km radius of their home and restrictions on shopping.
The lockdown, initially set to a two-week term, was extended by another week to its new deadline of Friday, 16 July.
In Darwin and Alice Springs, lockdown restrictions lifted on Friday afternoon, while Melbourne residents saw eased limits on Friday morning.
Brisbane and Perth, on the other hand, had entered swift lockdowns resulting from the Bondi cluster, which ended prior to last week.
The Australian Banking Association has launched further COVID support for customers across its members, with a national package to be made available to small business and home loan patrons either significantly impacted by current lockdowns or recovering from recent ones.
The package, which is subject to re-authorisation by the ACCC, includes:
Home loan support
• Range of support measures, including deferrals on a month-by-month basis
• Available to both individual and business customers
Business banking repayment deferrals
• Up to three-month repayment deferrals, with loan terms extended accordingly
• Offered to all small-business customers (business lending less than $3 million and a turnover of less than $5 million), which includes up to 98 per cent of small businesses
• Only for loans in good standing (i.e. repayments up to date or engaged in a payment program with their bank)
Everyday banking support
• Refunds of merchant terminal fees for up to three months
• Waiving of fees and notice periods on cash deposit and farm management deposit accounts for up to three months
ABA chief executive Anna Bligh commented the recent lockdowns have “taken their toll on customers and the recovery can be slow”.
“This pandemic demonstrates why strong and stable banks are so important for the nation’s economy,” Ms Bligh said.
The Australian Small Business and Family Enterprise Ombudsman Bruce Billson has welcomed the banks’ ongoing efforts to support small businesses impacted by COVID-19 lockdowns.
“This is a positive initiative that will help many struggling small businesses stay afloat in these challenging times,” Mr Billson said.
“The banks’ commitment to support small businesses through this period is highly valued and is the kind of a key support element that could be incorporated into an agreed predictable and known national framework of support.
“Such a framework, involving both Government and private sector elements, step up as COVID-inspired economic constraints and introduced, up-levelled or extended that small and family businesses can count on when seeking to navigate these challenging and uncertain times
“I would encourage all small businesses owners who are experiencing financial difficulties to call their banks now to make the necessary arrangements.
“Home loan support, including deferrals on a month-by-month basis, is also available to small business customers.
“Banks are promising to support small businesses if they need it - so long as the loan is in good standing with repayments up-to-date or there’s a payment program in place.
“It’s encouraging to see our banks taking this proactive approach and leading by example.
“This consistency from the banks will help small businesses navigate and adapt to periods of uncertainty such as this.”
A number of individual banks have launched new measures for affected customers.
While ANZ did not launch any additional relief measures to its support already available on Friday, a spokesperson for the bank told Mortgage Business that customers are encouraged to contact ANZ to discuss their options.
Commonwealth Bank of Australia has extended the ABA support package, including offering a repayment holiday for up to three months for eligible small-business customer with a better business loan product of up to $3 million.
From Tuesday (13 July), CBA will also contact eligible businesses to offer a loan repayment deferral, through an online process.
For both business and retail home loan customers, the bank will extend targeted support for certain customers, including deferrals on a month-by-month basis.
Meanwhile, the bank will continue to offer loans to both new and existing customers under the federal government-backed SME Loan Recovery Scheme. The loans available to eligible businesses can range up to $5 million. Unsecured loans are also available, with a repayment holiday from 12 months.
The measures for businesses have added to CBA’s current range of support schemes, including fee waivers on merchant terminals.
CBA chief executive Matt Comyn commented that small businesses will be facing cash flow challenges as a result of restrictions on travel and the lockdowns.
“We recognise that some small businesses, like those in the tourism, hospitality and retail industries, are where the effects of lockdowns are being most acutely felt.”
NAB gave details around its extended support measures, adding on to existing relief for businesses and retail customers.
The further measures declared on Friday, in addition to existing support for small businesses, include:
• Restructuring of business facilities along with reduced or waived applications fees;
• Deferral of principle payments across multiple product options;
• Waiving costs and charges for withdrawing term deposits early, giving customers quicker access to cash flow;
• Credit card and personal loan relief;
• Professional wellbeing support;
• Business recovery loan options (under the federal government’s SME Recovery Loan Scheme) which provide borrowers the choice of a repayment holiday of up to 12 months, with the potential for up to 24 months, and up to $5 million in lending over 10 years.
Support is also available for individual customers, including:
• Providing a temporary reduced payment arrangement;
• Giving a temporary payment break;
• Where appropriate, restructuring a home loan or consolidating debt to suit different situations;
• Wellbeing support or referral to financial counselling.
Westpac has also extended the ABA package to its customers, adding to its existing support measures.
Existing COVID-19 business support:
• Case management support for our small-business customers experiencing financial difficulty.
• Reduced or deferred repayments on asset and equipment finance and eligible business loans.
• Business loan restructuring with no fees incurred.
• Referrals to financial counsellors or other support services.
• Eligible customers may be able to access low interest rate business loans through the federal government’s SME Recovery Loan Scheme.
Existing COVID-19 consumer support:
• Credit card repayment and interest rate reductions for a period of time.
• Home or personal loan repayment deferrals or reductions, interest rate reductions and loan term extensions.
• Fee waivers across a range of products.
• Restructuring of debt.
• Referrals to financial counsellors or other support services.
Peter King, CEO of Westpac, commented: “The pandemic is continuing to cause disruption for households and businesses across Australia and the banking sector has an important role in helping customers and the economy through this time.
“We are seeing the need for immediate support for small-business owners who are experiencing challenges with reduced trade, cash flow and foot traffic as more people stay at home, particularly in areas with lockdown restrictions like Greater Sydney.”
He also noted the bank had seen more than 175,000 mortgage customers and 40,000 business customers defer loan repayments through its COVID support packages in 2020.
Smaller banks also revealed extended support.
Bendigo and Adelaide Bank
Bendigo and Adelaide Bank has offered the ABA support package to its customers, encouraging them to contact the bank to discuss their options.
Newcastle Permanent has offered customers experiencing financial difficulty access to support through its Customer Assist program.
Assistance from the mutual bank will depend on customers’ individual circumstances, but it may include pausing loan repayments, reducing loan repayments and capitalising any arrears among other options.
The bank has also stated it will implement additional cleaning and preventative hygiene measures within branches, at its ATMs and in its workplace.
Suncorp Bank CEO Clive van Horen said that the lender supports the ABA support measures for customers affected by continuing COVID-19 lockdowns or those recovering from recent lockdowns, irrespective of geography or industry, stating: “While we learn to live in a world with COVID-19, we want our customers to know we’re here to help them so they can get back on the road to recovery.”
Sarah Simpkins is the news editor across Mortgage Business and The Adviser.
Previously, she reported on banking, financial services and wealth for InvestorDaily and ifa.