SYDNEY (CU)_Amid the COVID-19 outbreak in 2020, the Australia and New Zealand Banking Group (ANZ) gave its customers no-questions-asked deferrals on their mortgage repayments, from which the bank had learned “some important lessons”. Now, as borrowers are once again experiencing stress from the current lockdowns imposed in several major cities across Australia, ANZ hopes to offer a range of alternatives for customers in hardship, such as temporary cut in repayments or switching to interest-only payments.
“Instead of the deferral option being like a cover-all insurance policy that everyone takes out, it will be an option customers take out only if they really need it – like an extra lever we can add to our existing financial hardship process,” Mark Hand, ANZ group executive for Australian retail and commercial banking, said.
“Every customer’s circumstances are different and a deferral may not be the best option for some of them. That’s because the money still has to be repaid so there could be implications for their credit status down the track.”
This approach is in line with a package of measures announced by the Australian Banking Association earlier this month, under which deferrals for mortgage holders would be granted on a case-by-case basis for a period of up to three months.
According to ANZ, the bank has been inundated with calls for home loan assistance, of which three out of four phone calls were from NSW customers who have been under lockdown restrictions since June 26, on account of the latest wave of outbreaks across Greater Sydney. The multinational banking and financial service provider further noted that more than 50 per cent of requests were from small business owners who are also based in NSW. Many of these customers requested to reduce payments or to switch to interest payments, while some of them also made formal requests to defer loans for up to two months.
These observations are in line with those reported by National Australia Bank which said on Saturday (24 July) that around three-quarters of its customers requesting for help were from Sydney.
