Westpac Consumer division’s Chief Executive David Lindberg answers your questions
AUSTRALIA’S banking sector is rising to the challenge of supporting customers from all walks of life, affected by the COVID-19 crisis. Westpac Consumer’s Chief Executive David Lindberg was online to answer readers’ questions.
Hibernation
Don't miss out on the headlines from Hibernation. Followed categories will be added to My News.
- Contact tracing is the key to winning coronavirus war
- Classrooms must reopen now to avoid an ‘education divide’
THE COVID-19 crisis has brought massive challenges to Australia’s banking sectors, fuelled by widespread job losses and economic uncertainty.
More than 100,000 Westpac Banking Corporation customers have applied for mortgage repayment relief due to losing income or their job, since the bank released its consumer support package last month.
This package allows customers to defer mortgage repayments for up to six months, while other support measures have been put in place to assist credit card customers.
Lockdowns around the country have prompted a surge in the number of customers seeking to access online banking services to manage their money, and the bank has also implemented changes to make it easier for our customers to apply for a home loan completely online.
The bank’s customer service phone lines have been flooded with calls about bank services, debt support and home loans.
Westpac’s Consumer division chief executive David Lindberg was online today to answer your questions.
Here’s what he had to say:
Q. I applied for a deferral of my mortgage repayments for six months and was given approval. How will this affect my credit rating and the term of my loan? Will it end up costing me more money? I have lost about 30% of my earnings and am really struggling as I am the main earner in my family.
A. I know it’s really hard to lose income at this time. It feels unfair, because it probably had nothing to do with what you did. As I’ve said to many people struggling – this will not last forever, and you are not alone. I hope the mortgage repayment relief is providing some assistance with managing your household budget while you get back on your feet. While I can’t speak for all banks, Westpac’s support means that both principal and interest repayments will be deferred for three (or six) months and incorporated into the remaining balance of your loan. We will also give customers a one-off payment to offset the interest charged on interest which is accrued during the deferral period. If the support isn’t enough, or you just feel a little overwhelmed, give us a call and we can help. A lot of people are calling us with very similar problems, so there might be a wait – but please be patient and we’ll help you. We want every customer to get through this with enough money to enjoy their lives – including you. I also want you to know that we’ve made sure anyone’s credit rating won’t be hurt if they take advantage of one of our COVID-19 packages.
Q. How is the bank approaching new loans? The new housing sector faces a massive slump – should the banks shut up shop and not provide people with loans to build?
A. Westpac is definitely open for business for all types of home lending (including construction loans). I think this is one of the most important things for a bank to support right now. In fact, we have committed $10 billion in mortgage lending through this crisis in order to support the housing market. We have also put our mortgage process online, so our customers can get mortgages safely from wherever they are. While there’s some negative commentary on the outlook for the property market at the moment, the majority of customers are looking to buy a home or invest in a property for the longer term. We’re there to support them if that’s what they want to do.
Q. My family business runs an entertainment business that looks after pubs clubs and NRL entertainment. Obviously we’ve lost 100 per cent of our business earnings and have been approved for loans on hold for six months. Will we be able to go to interest only after that six months if our work hasn’t come back, instead of principal and interest?
A. I’m sorry to hear about your family’s business. Family business is the lifeblood of our economy, and I so hope you can get through this. We’re here to help you, and make sure you keep trading after this crisis. I’m glad that you’ve got the news your loans are on hold for now. As part of our COVID relief packages we’re making it possible for customers on principal and interest payments to switch to interest only for 12 months – you’ll be able to take advantage of this at the end of the period. It’s best to talk to us about your specific situation so we can give you and your family specific advice when that time comes. Most importantly, please stay strong. Thousands of businesses are facing similar issues, and we will all try to get through this together.
Q. Will Westpac be waiving its bank fees to give all customers a break? Every dollar matters to us at the moment.
A. I know it’s a really hard time at the moment, for many people. We really do want to help our customers get through. If there is a fee you’re having trouble affording, we will definitely waive it. We’ve rolled out a range of support for customers – which includes some automatic fee removals. If you need support with specific products and services – please talk to us and we can help.
Q. I am worried about my savings which are in a term deposit. How can I be sure my savings are safe in the bank?
A. I know this is a scary time for everyone, but I want to reassure you that Westpac is a strong and stable bank. In fact, we may never have been in a stronger position. Over the past decade, and following the GFC we have strengthened our business to not only allow us to absorb significant shocks but continue to support customers when they need it the most. We didn’t know a pandemic was coming, but in many ways, we’ve been preparing the bank for a situation like this. We’ve been around for more than 200 years and plan to support customers for much longer. I can give you my personal assurance that your money is safe with Westpac.
Q. Do you think Westpac will follow NAB and try to raise capital?
A. That was a decision for NAB, and was specific to their circumstances. What’s important for us is that Westpac remains strong and well capitalised. We have our results on Monday, and will be presenting more information then.
Q. My partner and I are wanting to apply for a home loan but don’t feel comfortable going into a branch. Can I apply for a loan online?
A. Absolutely you can apply online! St. George and Bank of Melbourne have a market leading digital home loan – in fact almost a third of our applications are now digital. In our Westpac brand (and across all our brands) we’ve established processes in response to COVID-19 that allow our customers to complete their home loan remotely. This is through a combination of the use of digital forms, video calls with lenders, and emails. Thousands of Australians are still buying homes and taking up mortgages. I hope you have found or will find the right home for you and your family.
Q. Should I sell my Westpac shares or buy more?
A. I’m not sure of your financial situation, or your financial objectives – so I don’t think I can provide you with a black and white answer. I’d suggest that you have a chat to a financial planner. I will say that Westpac has a strong balance sheet. We are Australia’s oldest company, and I expect us to remain an enormous part of the country for many years to come.
Q. Will the bank be passing on any more interest rate cuts in full? Do you think the Reserve Bank will cut interest rates again and by how much?
A. I wish I knew in advance whether the RBA would reduce rates – but we’re not told in advance. We do try to pass them on when we can. We balance lots of considerations before making any decisions. I want rates to be as low as possible for our mortgage customers, but try to support depositors as well, many of who rely on interest to survive. I also need to support retail shareholders, who are mostly mums and dads, who count on us for a fair return. We’ve had four reductions in the past 12 months, and right now our rates are at the lowest they’ve been – for both us and the RBA. We have a one, two, and three-year fixed loan at 2.29 per cent, which is the lowest I’ve ever seen.
Q. Have any Westpac branches been closed and will they reopen? Have there been any job losses?
A. Bank branches are a symbol of security for so many, and I believe it’s really important to keep as many of our branches open as possible. We decided to close a few of our branches temporarily so our staff can answer the huge number of calls coming in from customers regarding packages. We’ve asked staff in these branches to move to our Call Centres to help our customers. They’ve all agreed to do it – which I am really grateful for. I expect these branches to re-open when the situation allows them to. There have been no job losses as a result of these temporary closures. I think now is the time for us as a big business to step up and support both our customers and our staff.
Q. My elderly mum has been told by her doctor to stay home and not go out at all as she has a lot of serious health conditions. She wants to learn how to do internet banking but I haven’t been able to show her with any success – do you have any advice?
A. We’re all being encouraged to keep safe at home if we can and this is even more important for older Australians. My own mother in law is in a similar position of staying home from work. She’s doing her banking online just fine. She tells me she misses our branch people though. It’s great to hear you want to help your mum transition to online banking. We’ve helped tens of thousands of customers to do this over the past couple of weeks – so it absolutely can be done! Here’s my three top tips to get going online:
1. You’ll need to register through our website. Jump online with your mum and make sure you have her customer card details or customer ID handy.
2. Once you are set up, you can try to send a trusted friend or family member a payment for a small amount and then check if they received it.
3. Lastly, make sure your mum has antivirus software to help protect her information.
We also have how-to videos and step-by-step guides online. If you’re still having trouble, you could pop into one of our branches for a quick tutorial on how to get set up to take back to your mum.
You can read more answers in the comments below
Originally published as Westpac Consumer division’s Chief Executive David Lindberg answers your questions