In releasing its full year results for the 2020 financial year, a major bank emphasised the strengths of its core businesses and highlighted the growth achieved across its lending books.
However, CBA's cash net profit of $7.3bn was down 11.3% from the year previous, a reduction partially attributed to credit provisions rising to help mitigate COVID-19's impact on consumers.
Over the year, the bank’s business lending book swelled by 7bn, while home lending grew by an additional 18.4bn – a rate 1.3x system.
As of 31 July, the number of home lending accounts opting to defer repayments was down from the May peak of 154,000. The month closed out with 135,000 under active deferral, amounting to $48bn in balances and comprising 8% of the banks’ home loan accounts.
Of that figure, 25% were making some repayments as of 31 July, while 14% had 12 months or more worth of payments in advance. Just 15% were interest only accounts, while the remainder was made up of customers paying principal and interest.
Most mortgage holders who elected to pause their payments were based in New South Wales (33%), Victoria (26%), Queensland (18%), and Western Australia (16%).
According to CBA CEO Matt Comyn, the group is monitoring its lending portfolio and providing tailored support to customers through ongoing reviews, proactive assistance, regular check-ins, and by making it simple to opt out of deferral through its mobile app.
Business lending also came down from its peak of 86,000 accounts deferring repayments in May to 59,000 total business loans with active deferrals at the close of the financial year, amounting to $14bn in balances, or 15% of the bank’s business lending book.
The state breakdown mirrored that of residential lending, with most paused accounts based out of New South Wales (33%), Victoria (25%), Queensland (17%) and Western Australia (12%).
Comyn highlighted how the strong position of CBA enabled the group to support its customers during the pandemic through loan deferrals and additional lending, particularly to SMEs.
“The strength of our core banking businesses, combined with strong operational performance, has delivered good outcomes for our customers and shareholders – despite the challenges presented by lower interest rates and COVID-19,” he said.
“The next few months will be critical and some sectors will take longer to recover than others, however, we remain positive about Australia’s long-term prospects.
“We will also continue to work with government, regulators and our industry peers to support initiatives that stimulate economic activity and jobs.”
