The Commonwealth Bank of Australia (ASX: CBA) share price, along with other S&P/ASX 200 Index (ASX: XJO) bank shares, could be in the spotlight on Friday. This comes as extended lockdowns result in a resurgence of requests for loan deferrals from bank customers across Australia.
This morning, the Australian Banking Association (ABA) provided an update on the current rate of loan deferrals. The figures are considerably lower than during the peak of the crisis last year but still serve to illustrate the financial toll lockdowns are taking on thousands of home and business owners.
Banks provide hardship assistance
Since 8 July more than 14,500 home loans and 600 business loans have been deferred, according to the ABA.
Interestingly, during this time, the CBA share price managed to rally 4.23% to $103.41.
In response to the sweep of lockdowns taking place across Queensland, New South Wales and Victoria, ABA Chief Executive Office Anna Bligh said "support is available to all small businesses and home loan customers significantly impacted by current lockdowns or recovering from recent lockdowns, irrespective of geography or industry."
The ABA observed that hardship approvals and loan deferrals were heavily skewed towards NSW, given its more severe COVID-19 situation and extended lockdown.
"NSW home loan deferrals account for more than two thirds of total deferrals, while almost 80 per cent of deferred business loans are also from NSW."
The ABA went on to report that:
"The number of customers accessing hardship grew by 73% this week, compared with a growth of 153% the week before. Growth in housing loan deferrals similarly slowed from 344% to 79%, while growth in business loan deferrals grew from 93% to 108%."
How does this compare to peak COVID-19 figures?
Despite the uptick in loan deferrals, the current figures pale in comparison to peak COVID-19 figures in 2020.
The ABA reported that during the peak of the crisis, almost 500,000 home loans and over 225,000 business loans were deferred.
According to CBA's FY20 results, the bank had over 250,000 loan repayment deferrals at the time.
Encouragingly, in CBA's 1H FY21 results, the bank said that "by December 2020, the majority of customers on repayment deferral arrangements have returned to normal repayments upon expiration of deferrals".
CBA share price in 2021
The CBA share price has rallied an impressive 23.47% year to date with most of its gains occurring between April and mid-July.
Shares in Australia's biggest lender have largely stalled since their all-time high of $106.57 on 17 June, possibly dragged by factors including Sydney lockdowns and a fall in lending indicators.
