Banks give borrowers more time to repay loans as Melbourne’s renewed lockdown sends share prices plummeting
- Melbourne’s new lockdowns have caused Australian share market to lose gains
- Australia’s banks have also extended repayment holidays beyond September
- National Australia Bank is extending repayment pause until March 31, 2021
Melbourne’s new lockdowns have caused the share market to slip amid fears a new coronavirus outbreak will delay Australia’s economy recovery.
The Australian Securities Exchange was on track to finish Tuesday in a stronger position until the last hour of trade, when Victorian Premier Daniel Andrews announced more than five million residents in greater Melbourne and the Mitchell shire to the north would be locked down for six weeks.
The benchmark S&P/ASX200 went from being 0.7 firmer very late in the afternoon to finishing the day 0.03 per cent weaker.
New South Wales, as of Wednesday, has closed the border to Victoria, for the first time since the Spanish flu in 1919.
Melbourne’s new lockdowns have caused the share market to slip amid fears a new coronavirus outbreak will delay Australia’s economy recovery. Pictured are police at Albury on the New South Wales-Victorian border ensuring Victorians didn’t cross the Murray River
The big four banks had also announced on Tuesday that six-month repayment holidays for borrowers, that were due to end in September, would be extended by four months.
Australian Banking Association chief executive Anna Bligh said borrowers in genuine need would have to ask their bank for an extension rather than assuming it would be automatic.
‘This next phase of bank support will avoid a “cliff” for customers in September and give them the breathing space they need to work with their bank and get back on their feet financially,’ she said.
‘Australia’s banks supported their customers as the country entered the COVID-19 crisis and they are determined to support their customers on the way out of the crisis.’
The ABA estimates that since March 800,000 loans, collectively worth $260million, have been deferred.
National Australia Bank chief executive Ross McEwan said home and business borrowers would be able to extend the pause on their repayments until March 31, 2021.
‘While a significant portion of businesses and homeowners that we have spoken to have started their repayments again, there are clearly still many customers who may need support for a bit longer,’ he said.
‘Bankers will speak with customers about their individual circumstances and the options appropriate for them which may include loan restructure, determining alternative fund sources, hardship assistance or further deferral for up to four months.’
National Australia Bank chief executive Ross McEwan said home and business borrowers would be able to extend the pause on their repayments until March 31, 2021