According to figures released by the Commonwealth Bank, in a sign that financial pressures have somewhat eased for many borrowers, the number of account holders whose loan problems are being closely monitored by the CBA has almost fallen by 50% over the past 12 months.
Figures released by the bank as part of its record $6.1 billion profit announcement demonstrate that far fewer customers are still experiencing problems with mortgages and personal loans as compared to October 2009.
Certainly late last year the fallout from the GFC was having its biggest effect on the Australian economy. There was the threat of rates going higher and higher and at the same time as the Reserve Bank moved to battle inflation.
CBA had put on a large number of people during 2008 to manage problem loans and customers with mounting debts.
By June 2009, 9325 account holders had sought assistance from the bank for their home and personal loans and outstanding credit card bills. Mortgages took up an increasing share of the referrals during the remainder of the year. The total number of customers requiring help with their loans went up to 13,299 in October before starting a slow but steady drop from January.
That figure has since decreased to 5132 customers with credit card problems, which has remained at a relatively constant level for the past six months, now drowning out the smaller numbers of borrowers with problem home loans and personal loans.
The figures are a useful guide to the wider affect across the community of mortgage stress given that the Commonwealth Bank is the largest lender in the Australian housing market. They also underline just how much customers have been focusing on reducing their levels of debt. Current statistics indicate that 70 per cent of CBA funded home-loan borrowers were well ahead on their monthly repayments. The average figure among them is nine payments.
Nonetheless, like its competitors, the CBA has introduced more stringent lending criteria since the first-time home buyer boom of last year that was underpinned by government cash handouts to prevent the housing market slipping into recession.