Lending a hand beyond September

Speaking to bluenotes via phone call, ANZ Group Executive for Australia Retail and Commercial Mark Hand said the decision to further extend deferral periods for some customers is the right thing to do.

"ANZ only saw about 9 per cent of home loan customers actually decide to take up the deferral arrangement.”

“We have spoken with the regulators and government and, as an industry, have agreed to extend the period for customers where the impact is still significant,” he says.

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Hand explains in some cases, that will mean the customer has deferred payments to as late as 31 March 2021. Although the initial deferral package was announced in late March – resulting in the offer ending in September – there is no end date for applications which are still open. Mortgage customers have a three-month checkpoint to decide whether they think it is necessary to continue to defer their payments.

Circumstantial

Hand says the bank only saw about 9 per cent of home loan customers actually decide to take up the deferral arrangement and that many who initially expressed interest decided it wasn’t a necessary action for their circumstances.

“Over half our customers have not seen a change in their income level. In fact, around 11 per cent of our customers have actually seen an increase in income since the pandemic hit for various reasons,” Hand says. “Some of them might be working more hours – such as a part-time nurse who has gone full-time in this environment. A collection of customers’ income is off a little bit - around 20 per cent. And then there are certain customers who unfortunately have seen their income drop to zero.”

Round two

In early March, after the package was announced, ANZ’s contact centre was receiving thousands of phone calls a day given the levels of uncertainty in the community. The numbers are now down to just over 100 calls a day from customers enquiring about the package. However, Hand says the second lockdown period in metropolitan Melbourne and Mitchell Shire may see numbers begin to rise again.

“A lot of small business customers may have been able to absorb the impact of the first shut down but some are going to find it very difficult to endure a second shutdown period and a second big blow to their business.”

Hand says when the second period of lockdown ends, the other states will have recorded a few months’ trading history of businesses and incomes so the bank will be able to get a much stronger read on what's likely to happen next in Melbourne.

However, it may not be all doom and gloom for Australia’s economy with certain data showing activity levels higher than what was initially feared.

“The value of transactions going through ANZ’s merchant facilities is higher than the same time last year and certainly higher than when the pandemic first hit,” Hand says. “But there has been some really pleasing economic data that has not been as bad as we first anticipated.”

Andrew Cornell is managing editor of bluenotes