Banks launch new COVID relief deals as cases surge

The Australian Banking Association has announced a national support package for business and home owners, including loan deferrals and fee waivers, as COVID-19 lockdowns continue to cause financial hardship for many Australians.

The ABA announced on Thursday evening a suite of policies aimed at supporting businesses and mortgage holders as growing COVID-19 cases in Sydney cast doubt over when the city will come out of lockdown.

The federal government announced on Thursday it would extend COVID-19 support, including $500 per week payments and scrapping the $10,000 liquid asset test, amid calls for a revival of the JobKeeper wage subsidy.

The Australian Banking Association has launched a new suite of support for businesses and individuals impacted by COVID-19. Credit:

NSW recorded its highest number of daily cases on Thursday during the latest outbreak, with 38 new infections, as the highly contagious Delta variant continues to plague the city.

The ABA’s 22 members include the big four banks – Commonwealth Bank, National Australia Bank, ANZ and Westpac – as well as regional and international banks.

ABA chief executive Anna Bligh said the support package was available to all small business and home loan customers that had been “significantly impacted by the current lockdowns” or were still recovering from recent lockdowns “irrespective of geography or industry”.

“Customers can rest assured that if they need help, they will get it. Your bank will help you find a way through, don’t tough it out on your own,” Ms Bligh said. “Banks also stand ready to support larger businesses and they will be assessed on a case by case basis. Customers who need support should contact their bank.”

The national support package includes business loan deferrals of up to three months, with loan terms extended accordingly, offered to all small business customers with less than $3 million debt and annual turnovers under $5 million.

These customers will also be eligible for merchant terminal fee refunds of up to three months and fee waivers on cash deposit and farm management deposit accounts for up to three months.

Mortgage holders will also be eligible to apply for loan deferrals on a month-by-month basis, which is available to both individual and business customers.

Commonwealth Bank said it will proactively contact eligible small businesses to offer loan deferrals from Tuesday next week as chief executive Matt Comyn said restrictions and lockdowns continued to cause cash flow challenges. “We recognise that some small businesses, like those in the tourism, hospitality and retail industries, are where the effects of lockdowns are being most acutely felt,” Mr Comyn said.

The package is subject to authorisation by the Australian Competition and Consumer Commission. Ms Bligh said the pandemic demonstrates the need for strong and stable banks.

“It is clear that the recovery from recent lockdowns in some states, like Victoria, is slower than in previous cases and ongoing lockdowns are causing pain for some customers,” she said.

The big four banks last month promised customers experiencing hardship due to forced business closures could apply to reschedule loan repayments and request a range of fees to be waived or reduced.

The major banks began winding back provisions for bad loans and increasing dividend payments during the corporate reporting season in May, after better-than-expected economic conditions and falling COVID-19 case numbers.

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