The Commonwealth Bank of Australia (ASX:CBA) share price is pushing higher on Thursday after providing an update on its COVID-19 loan deferrals…
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The Commonwealth Bank of Australia (ASX: CBA) share price is pushing higher on Thursday following the release of an update.
At the time of writing the banking giant’s shares are up 0.5% to $63.94.
Why is the CBA share price pushing higher?
Investors have been buying the bank’s shares after it released an update on its COVID-19 temporary loan repayment deferral data through to the end of August.
According to the release, Commonwealth Bank’s total loan deferrals stood at 174,000 at the end of August, down slightly from 182,000 in July and 210,000 in June.
In respect to dollar value, the balance of these loan deferrals reduced to $59 billion from $62 billion in July and $67 billion in June.
Home loan deferrals.
Commonwealth Bank’s home loan deferrals represented 7.4% of its portfolio at the end of August, down from 7.6% in July and 8.2% in June.
These loans account of 9.8% of its home loan portfolio by balance. Which was down from 10.1% in July and 10.8% in June.
Of these loans, 32.6% are investment loans, 14.6% are interest only, and 13.5% have an LVR >90%.
Small business deferrals.
Approximately 15.5% of small to medium sized enterprises (SME) loans were being deferred at the end of August. This was a reduction from 16.4% in July and 19.4% in June.
These appear to be higher value loans, with 24.1% of the portfolio (by balance) on deferral. This is down from 26.4% in July and 28.4% in June.
The end (of deferring) is coming.
Commonwealth Bank’s CEO, Matt Comyn, commented: “Since the onset of the pandemic, our priority has been to do what we can to assist our customers in managing the challenges of COVID19, including providing temporary loan repayment deferrals on approximately 250,000 home, personal and business loans.”
The chief executive notes that the end of the initial deferral period is coming and the bank is working with customers on what to do next.
“As we approach the end of the initial deferral periods, we have been contacting all customers with deferred loans to talk with them about their options, including returning to full or part payment, or converting their loans to interest only. Many of those contacted will be able to recommence their repayments. For customers who are facing financial hardship, we are reaching out to offer solutions tailored to their individual needs,” he concluded.
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