CBA chief executive Matt Comyn reported the bank is seeing around 300 to 400 deferrals per day during the ongoing lockdowns across NSW and Melbourne, while restrictions have lifted in Queensland and South Australia.
CBA has sent out communications to around half a million customers, having also made 12,000 calls to business customers in the last couple of weeks to discuss their relief options.
However, the loan deferrals have tapered off, according to the CEO, which he admitted is “not what you would expect”.
“I would expect that at least at this current level, we’ll see those numbers over several weeks,” Mr Comyn tipped, during a media briefing call on Wednesday.
“I think the area that we’re probably most focused on as well has just been targeted, either geographical for obvious reasons, and also some of the sectors – those that are exposed to hospitality, in certain cases, tourism and certain CBD areas and in small businesses, in particular.”
He added the current deferral numbers are also small compared with those of 2020, when the bank’s program, which ended in March 2021, saw around 158,000 customers sign up for deferred home loan repayments.
The majority of those customers (123,000) returned to repaying their loan, while 13,000 voluntarily closed their loans, 7,000 switched to interest-only and 8,000 refinanced. Around 5,000 received hardship assistance, while others benefitted from a freeze on forced home sales (CBA has committed to a freeze on forced sales for owner-occupiers until February 2022).
“I think what we saw that’s different from last year, because going in, particularly at the start of the pandemic, there was an enormous amount of uncertainty. And I think most people assumed that the restrictions were going to last for six months,” Mr Comyn reflected.
“What we did see post those restrictions easing was a strong bounce back in economic activity. Many customers who took out a deferral last year continued to make their payments throughout.”
The current conditions have started to repeat indicators that arose last year in Melbourne, such as slowdown in property listings, Mr Comyn said, although the market clearance rates are still high.
Reflecting on the impact of the lockdowns on mortgage lending, he commented: “I’d say, there’s just a slight easing in very recent times, so more to the last couple of weeks, not reflective of June, which was obviously a very strong month.
“Nationally, so maybe [there is] perhaps a softening – we would anticipate that continues for the duration of the lockdown.
“But, I mean, given the acceleration in the property market, and I think in a market like Sydney, we’re looking at about 18 per cent capital gains growth over the last 12 months and 16 per cent or so over on a national basis. A slight easing is… in some ways, a good thing.”
CBA has still been optimistic about Australia’s economic recovery and prospects, predicting strong growth in 2022, although it believes the current lockdowns have pushed out some forecast growth factors by around six months.
Meanwhile, the bank’s 2021 financial year results were published on Wednesday, revealing a cash net profit after tax of $8.6 billion, up 20 per cent the year before.
CBA also launched a $6-billion off-market share buyback, while declaring a final dividend of $2 per share – adding to a total full-year payout of $3.50 per share.
The bank cited an “improvement in economic conditions and outlook resulting in a lower loan impairment expense and a strong contribution from volume growth in all core markets” for its strong result.
CBA’s total loan book (including Bankwest) surpassed half a trillion dollars, reaching $516 billion as at June 2021.
However, the proportion of new loans written by brokers fell, with brokers making up 44 per cent of new lending – down from 47 per cent in June 2020.
A spokesperson for CBA, however, alerted Mortgage Business sister publication The Adviser that the bank has boosted investment in the broker channel, adding 25 per cent more full-time staff to support brokers.
Meanwhile, CBA has flagged an upcoming direct-to-consumer digital mortgage offering called Unloan, backed by venture capital arm x15, and expected to roll out later in the year.
The business will be the second digital property-buying venture under x15, following Home-In, which is marketed as a digital assistant for the purchase process.
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.