Consumer credit facilities are one loan category in deep trouble in banking, the latest APRA overview of loan repayment deferrals due to COVID-19.

Over June, the undefined deferred loan type in the APRA data leapt by one third to A$25 billion. These are assumed, by Matthew Wilson at Evan and Partners, as “likely unsecured consumer loans”

As at 30 June, data submitted by all ADIs to APRA “indicates that $274 billion worth of loans have been granted temporary repayment deferrals, which is close to 10 per cent of total loans outstanding.

“Housing loans make up the majority of total loans granted repayment deferrals, although small business loans have a higher incidence of repayment deferral with 17 per cent of small business loans subject to repayment deferral, compared with 11 per cent of housing loans.”

There are signs some struggling borrowers are finding a way out.

Loans “loans exiting from repayment deferral”, which totalled a mere $2 billion in May, reached $18 billion in June.

Exiting via default, failure or a stay-in-business refinancing or recapitalisation? Dunno.

E&P’s Wilson notes: “The data on borrowers continuing to make payments is instructive and has unfortunately fallen from 34 per cent in April 2020 to 20 per cent in June 2020.”