(Reuters) – Australian lenders deferred a further A$40 billion ($28.47 billion) loans in June, the country’s financial watchdog said on Tuesday, as borrowers struggled to service their debts in the wake of the coronavirus crisis.
The total amount of loans deferred stood at A$274 billion as at 30 June, up from A$230 billion a month earlier.
The COVID-19 pandemic has knocked the Australian economy into its first recession in three decades and forced policymakers to roll out hundreds of billions of dollars in stimulus.
Last month, the Australian Prudential Regulation Authority (APRA) said banks will extend the loan repayment deferral period to 10 months from six.
The extension from a previous end-date of September reflects concerns that economic repercussions from the pandemic will continue when current government income support expires.
APRA said in a statement that housing loans were granted the most deferrals, although loans for small businesses had a higher incidence of repayment deferral with 17% compared to 11% for housing loans.
The number of loans returning to a performing status however surged during June.
Figures released by APRA show around A$18 billion worth of loans exited from repayment deferrals in June, significantly higher than the A$2 billion in May.
(Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Shri Navaratnam)
