Earlier this week, Prime Minister Scott Morrison urged the business community to support the government’s efforts to address the growing economic impact of the coronavirus (COVID-19) pandemic.
Mr Morrison specifically thanked the banking sector for passing on the full 25 bps cut from the Reserve Bank of Australia (RBA) following its fourth cut to the cash rate earlier this month.
“The big four banks have also outlined other measures to support affected customers, which include repayment relief on home and business loans, and the expansion of servicing capabilities.
This comes amid reports that some European banks would suspend mortgage repayments for borrowers directly impacted by COVID-19.
The Commonwealth Bank of Australia (CBA) has announced it would provide additional resourcing and extended hours for commercial lending teams, in a bid to “ensure faster decision times” for small business loans.
CBA said it would also support impacted business customers by:
- deferring repayments on a variety of business loan and overdraft products, for 90 days.
- waiving merchant terminal fees for impacted customers with CBA payment terminals, for 90 days;
- waiving early redraw fees on business term deposit accounts (including Farm Management Deposit accounts);
- waiving establishment fees and excess interest on Temporary Excess products; and
- deferring repayments on vehicle and equipment finance loans and providing tailored restructuring options that meet individual customer needs.
“The Commonwealth Bank recognises the uncertainty as the nation responds to the challenges posed by the coronavirus,” CBA CEO Matt Comyn said.
“Australia has a strong and stable financial system and economy, and we recognise the important role we play to support our customers, our people, our suppliers and the economy. We are assessing the impact on our operations on a daily basis.
“Our first priority remains at all times the safety and wellbeing of our customers and people. We are taking practical precautions in line with the latest guidance from federal and state authorities.”
CBA has also committed to prioritising payments to small and medium business suppliers, adding that it would consider ways to offer flexibility to suppliers that have suffered the most disruption.
“Commonwealth Bank’s strong financial position means Australians can have confidence in our ability to support the economy in this period of difficulty, through to a time of recovery,” Mr Comyn added.
Last month, CBA also announced its new Home Loan Compassionate Care initiative, which would cover mortgage repayments over a 12-month period if a customer, their spouse, or dependant passes away or is diagnosed with a terminal illness.
However, customers infected with COVID-19 would not be eligible for the cover, unless certified by a medical practitioner with a terminal illness.
The cover also includes a 12-month exclusion period for new customers who pass away from an illness or injury that was medically diagnosed before settlement.
NAB has also stated that it would offer support services to customers, which may include the suspension of repayments or interest, a reduction of the loan amount or the waiving of fees.
NAB has outlined specific measures to assist businesses with cash flow challenges, which include:
- deferral of business loan repayments for up to three months, assessed on a case-by-case basis
- extension of a business loan term by a period of up to three months, where individual circumstances warrant
- support to restructure existing business loans, including equipment finance
- business credit card deferred repayments.
“We work with all our customers on a case-by-case basis and encourage any customer experiencing hardship – regardless of the circumstances – to contact us to see how we can better support them,” a NAB spokesperson told Mortgage Business.
Meanwhile, Westpac has stated that its hardship assistance program would be available to affected customers.
The program includes the deferring of repayments for up to three months.
Will Ranken, Westpac general manager, home loans, told Mortgage Business: “We recognise that COVID-19 is impacting our customers and we are committed to supporting them during this time.”
“We encourage any customer with concerns about their loans and repayments to talk to us so we can provide support.
“Westpac has a dedicated hardship assistance program to help customers experiencing financial stress, including deferring repayments.”
ANZ has also committed to providing support to customers and businesses affected by the coronavirus outbreak.
The bank said its support would include suspending interest repayments, providing early access to term deposits without incurring break fees, and providing access to additional credit.
Here are specific web pages setup by the banks;
St George / Bank of Melbourne
Bendigo and Adelaide Bank