CBA reports above market growth in home lending

by Madison Utley14 May 2020

CBA yesterday gave its update for the March quarter, highlighting the support it has provided to the Australian economy and releasing updated statistics around the utilisation of its COVID-19 support package.

“Since the start of the pandemic, we have provided support to approximately 100,000 businesses and one million personal customers,” said CBA CEO Matt Comyn.

“This includes the deferral of repayments on approximately 240,000 home, business and consumer loans, lower interest rates for borrowers, increased interest rates for depositors, and waived fees and charges.”

As of 30 April 2020, the bank had received deferral requests on 144,000 home loan accounts with balances totalling $50m. Of the requests, 71% concerned owner occupied loans with the remaining 29% from investment. Just 16% of the deferral requests were for interest only, while 84% regarded principal and interest loans.

For business lending, CBA registered 70,700 loans for repayment deferrals with a balance of $15.2bn.

On 1 May, CBA reduced repayments for all variable P&I home loan accounts to the minimum required, releasing up to $3.6bn of additional cash flow into the economy.

Further, as of 6 May, the major had approved over 6,500 applications for over $555m of new lending through the Coronavirus SME Guarantee Scheme. The sector breakdown thus far is retail trade (18%), construction (16%), accommodation, cafes and restaurants (14%), business services (12%).

“We’ve been able to do this quickly, thanks to our investments in digital banking and technology and the support of tens of thousands of people in our branches and Australia-based contact centres,” said Comyn.

“Through our strong operational execution, our banking businesses have performed well – resulting in above market growth in deposits and home lending, and continued growth in business lending.

“Our balance sheet is stronger than ever before. Compared to pre-GFC levels, we now hold three to four times the provisions for credit losses and our capital ratios are more than double on a like-for-like basis.”