“Banks are seeing customers who have deferred or reduced payments restarting their normal payments. That means people know what’s available when it comes to loan relief, and they also know why it’s a good idea to restart payments if they can.”
According to the New Zealand Bankers Association a total of 66,870 customers with loans totalling $21.3 billion had reduced their loan repayments since March 26, and a further 55,406 with combined loans of $19.5b had deferred all their loan repayments.
Bankers’ Association chief executive Roger Beaumont said “mortgage deferrals could provide borrowers financially affected by Covid-19 with immediate relief at an uncertain time.
Beaumont said before making any decisions to extend mortgage deferrals banks would need to assess the customer need. “It would also involve discussions with regulators and credit reporting agencies on any impact to responsible lending obligations and how the deferred loans are treated.”
The BFGS lending is also dwarfed by other bank lending to businesses since March 26 when the nation went into lockdown to prevent the spread of covid-19. Banks have lent $12.6 billion in new loans to 21,875 businesses between then and June 30. That’s up from $7 billion on May 26.
Kiwibank chief executive Steve Jurkovich has been appointed the new chair of the New Zealand Bankers’ Association. He will be taking over from Westpac CEO David McLean, who chaired the NZBA for three years.
Kiwibank chief executive Steve Jurkovich has been elected chair of the New Zealand Bankers’ Association and takes on the role today. This is the first time Kiwibank has chaired NZBA.
ASB chief executive Vittoria Shortt was elected deputy chair. The chair and deputy chair take on their respective roles for two years.
New Zealand Bankers’ Association chief executive Roger Beaumont welcomed Mr Jurkovich as incoming chair. “We’re delighted to have Kiwibank chairing the NZBA Council for the first time. This leadership role reflects Kiwibank’s contribution as a major bank in the industry.”
Mr Jurkovich said banking touches the lives of millions of Kiwis every day and the Covid-19 pandemic showed how banks can and should step up to support their customers through such difficult times.
“As chair of NZBA and chief executive of the largest New Zealand owned bank, I look forward to highlighting the role banks play in supporting the economic wellbeing of New Zealanders and New Zealand businesses, and to building the public perception of banks.”
Mr Jurkovich and Mr Beaumont thanked Westpac CEO David McLean for chairing NZBA over the past three years.
“David made a special contribution as chair,” Mr Beaumont said.
“He provided valuable leadership at a time when the banking industry faced issues including the conduct and culture review, an increase in banks’ capital requirements, and more recently the Covid-19 pandemic.”
Established in 1891, NZBA is the voice of the banking industry. The association works with member banks on non-competitive issues to tell the industry’s story and develop policy outcomes that deliver for New Zealanders.
The association currently has 17 members, all of which are banks registered under the Reserve Bank of New Zealand Act 1989. The association’s governing body is its council, comprising the chief executive of each member bank. In addition to these members, NZBA has nine affiliate memberships with other organisations that support the banking industry.
ENDS
The New Zealand Bankers’ Association confirms Treasury officials met with its members, including the CEOs of the country’s biggest banks, on March 16 to talk at a high level about the possibility of introducing a term lending facility.
“Other important factors that determine retail interest rates include the cost of wholesale funding from overseas and the cost of domestic funding, which includes rates of return on retail bank deposits.”
“They’re doing it to provide immediate loan relief to customers in need who have been financially affected by the pandemic. It gives them the ability to defer all loan repayments at an uncertain time, and interest continues to accumulate. Banks are responsible lenders and suggest customers only defer all loan repayments if they need to.”