Income tax refunds used to pay off mortgages, says Commonwealth Bank
The Morrison government's tax refunds have been going toward paying off mortgages and credit card debt, Commonwealth Bank suggests.
Their September update showed a decline in number of lenders who are behind on their mortgages, and CBA have pinned that on the recent tax boost.
"Consumer arrears improved in the quarter due to seasonality and the benefit of higher tax refunds," the trading update advised.
Arrears in home loans, personal loans and credit cards all dropped from June to September.
Home loan arrears are still higher than they were two years ago despite the recent fall.
"Personal loan arrears rates remained elevated due to lower portfolio growth and continued pockets of stress in western Sydney and Melbourne," CBA noted.
Commonwealth Bank's September update saw them post $2.3 billion profits, up five percent, in the three months to September.
Bucking the general trend of the other big banks, CBA's profits were driven by a huge increase in household deposits, put at an annualised pace of 10.4 per cent in the quarter.
Two weeks after the May election CBA received more mortgage applications than in any week in the prior six months.
The profits weren't a huge surprise given the lack of high compensation costs factored in to last quarters performance.