New figures released by the Australian Banking Association (ABA) show Australia’s banks have deferred an extra 100,000 loans, including approximately 50,000 home loans, over the last week alone.
The total number of loans deferred is now at least 643,000, with their value sitting at over $200 billion.
ABA CEO Anna Bligh said the figures show that the financial impact of the crisis was still unfolding and customers continued to need support from their bank to get through it.
“These updated figures, together with figures not previously reported, bring the total number of loans deferred by Australia’s banks as a result of the COVID-19 pandemic to over 643,000, of which approximately 392,000 are home loans,” Ms Bligh said.
She revealed that the total value of loans which has been deferred had increased by at least $20 billion in just one week.
“These new figures, released today, show banks working overtime to ensure assistance is given where needed to customers who are affected by this crisis,” she said.
“The surge in demand for assistance from banks shows that the economic impacts continue to be felt, and by no means is the nation through this crisis.”
Confidence at record low
At the same time, Roy Morgan’s Monthly Business Confidence index has revealed confidence among business leaders has plunged to a consecutive record low in April, with businesses predicting tough conditions over the next 18 months.
According to the index, business confidence in April was down by 19.1 per cent to 76.9, on the back of strict social distancing and self-isolation directives from the governments that persisted throughout the month of April.
The sharp decline in business confidence in April was driven by more businesses, 64.8 per cent (up 25ppts) saying their business is “worse off” financially than this time last year. Businesses also reported being less confident about the Australian economy into the future, with nearly three-quarters, 73.2 per cent (up 10.5ppts), expecting “bad times” over the next year and over half.
Moreover, only a third, 35.9 per cent (down 10.3ppts), of Australian businesses said the next year will be a “good time to invest in growing the business”, while nearly half, 48.2 per cent (up 6.6ppts), said it will be a “bad time to invest”.
On a brighter side, Roy Morgan revealed some Australian businesses are already looking past the COVID-19 pandemic and are growing more confident about the next year, with 43.1 per cent (up 3.6ppts) expecting the business will be “better off” financially this time next year, while only 27.6 per cent (down 1.4ppts) expect the business to be “worse off”.
Michele Levine, CEO of Roy Morgan, noted that the PM’s three-step COVID-safe plan will boost confidence over the coming period.
“The announcement that Australia will undergo a three-stage reopening process over the next two months to ‘reboot’ the economy has provided further hope that Australia may already be past the worst of COVID-19 and businesses can look forward to less restrictions on their activities in the coming weeks,” Ms Levine said.