Arrears jumps in CommBank loan book

Arrears jumps in CommBank loan book
Arrears jumps in CommBank loan book

The Commonwealth Bank has revealed an increase in borrowers behind in their mortgage repayments.

The number of home loan borrowers more than 90 days overdue on their loan was sat at 0.65 per cent, up from 0.59 per cent at the end of December. 

There were emerging "troublesome exposures" mentioned in its stockmarket update on Wednesday morning.

However CBA said the credit quality of the group's lending portfolios remained sound. 

The bank noted "there has been an uptick in home loan arrears, influenced by a small number of customers experiencing difficulties with rising essential costs and limited income growth".

CBA said "consumer arrears were seasonally higher in the quarter".

Customers more than 90 days due on their personal loans rose from 1.21 per cent at the end of December to 1.39 per cent at the end of March, while credit card arrears also rose slightly, from 0.88 per cent to 0.98 per cent.

It also said a small number of loans had resulted in an increase "troublesome exposures", while impaired assets remained stable.

Overall, bad debts remain very low.

The Australian Financial review advised the loan impairment expense of $261 million in the quarter was 14 basis points of gross loans and acceptances, down from 16 basis points in the first half. CBA said it maintained "prudent" levels of credit provisioning with total provisions at $3.8 billion.

Westpac recently indicated at the end of 2017 its arrears rate was 1.2 per cent, down slightly from 1.3 per cent at the end of 2016. Westpac arrears were below historical peaks of 1.7-to-1.9 per cent. In New South Wales market, Westpac mortgage arrears are the lowest nationally at just 0.8 per cent, below the state's long-term average of 1.4 per cent.

Arrears Commonwealth Bank

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