Big four banks offer small business breaks
Banks have announced fee cuts and payment deferrals for small business ahead of a CEO meeting with Josh Frydenberg.
Australia’s biggest banks have announced cuts to fees and payment deferrals for small business customers ahead of a meeting between chief executives and Josh Frydenberg in Sydney on Wednesday.
The meeting between the Treasurer and the Australian Banking Association, chaired by Commonwealth Bank chief executive Matt Comyn, also included National Australia Bank chief executive Ross McEwan, Westpac interim boss Peter King and ANZ chief Shayne Elliott, who phoned in from the lender’s Melbourne headquarters.
The banks assured the Treasurer they were healthy enough to meet the challenges of the coronavirus, and that they were seeing positive signs out of China that the worst of the impact was behind it.
Mr McEwan said NAB was working with the government on additional measures to support small business customers.
“Banks have a critical role as the Australian community handles this unprecedented situation with the significant ongoing impacts of coronavirus, together with the continuing fallout of the bushfires and record-low interest rates,” he said.
“We’re doing our bit to support our customers and the broader economy. We will work closely with the Government on measures to support customers, particularly SMEs, through this. NAB kept lending through the GFC and we are determined to do the same now”
NAB had already announced it would defer business loan repayments for up to three months on a case-by-case basis, extend business loan terms and support a loan restructure. Business credit card repayments could also be deferred.
Also attending the meeting to discuss the industry’s response to the crisis was ABA chief executive Anna Bligh and representatives from Macquarie Bank, Bendigo and Adelaide Bank, Bank of Queensland, Suncorp, HSBC, Bank Australia and Rabobank.
The meeting took place as Australia’s sharemarket has dropped sharply on Wednesday morning, with shares in the major banks pummelled, falling between 2 and 4 per cent.
Late on Tuesday Commonwealth Bank said it would be “deferring payments and waiving fees” for small business customers, including terminal fees for impacted customers, early redraw fees for business term deposit accounts and farm management deposit accounts, establishment fees and excess interest on temporary excess products, and deferring repayments on vehicle and equipment finance loans.
“Australia has a strong and stable financial system and economy, and we recognise the important role we play to support our customers, our people, our suppliers and the economy,” CBA chief executive Matt Comyn said.
“We are assessing the impact on our operations daily.”
Speaking at a business summit on Wednesday, RBA deputy governor Guy Debelle said Australia’s banks were well positioned to negotiate an economic downturn caused by the coronavirus outbreak.
Dr Debelle said Australia’s banks were “well capitalised”, in a “strong liquidity position” and would be “resilient to a period of market disruption”.
Australian banks had raised a significant amount of wholesale funding and and had “robust” deposits, he said. “Spreads on Australian bank bonds have widened, although yields remain at levels that are still very low historically. We have not seen any particular sign of pressure in our daily market operations to date,” Dr Debelle said.
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