One of the Commonwealth Bank’s top bankers says businesses can probably survive Brisbane’s three-day lockdown, but with JobKeeper now withdrawn, longer shutdowns pose a bigger economic threat.
As the federal government and banks remove key planks of economic support, CBA’s head of business and private banking Mike Vacy-Lyle said business clients had told the bank they were getting better at coping with COVID lockdowns.
“A lot of businesses have sort of accepted that this whack-a-mole approach is going to be the new norm for COVID,” he said in an interview.
“I think businesses have pivoted to the extent that they can. But having said that, it’s a setback, it’s not good,” he said of the Brisbane lockdown, announced by the Queensland government on Monday.
“You can probably survive a three-day lockdown but when it comes to three months, it’s a different story,” he said.
When the pandemic first crashed into Australia’s economy last year, CBA automatically deferred $19 billion of business loans. According to Mr Vacy-Lyle, the bank currently had only $8 million of business loans on deferral and was “quite encouraged” by its discussions with firms that had been receiving JobKeeper.
The federal government on the weekend ended the $90 billion JobKeeper wage subsidy, with the closure of the stimulus program coinciding with the banks withdrawing their emergency loan deferrals for mortgage and business customers.
CBA’s group executive for retail banking services, Angus Sullivan, said more than 85 per cent of customers who had deferred their mortgages had now returned to their original repayments. Most of the remainder had moved to interest-only mortgages.
Despite Queensland’s move, and uncertainty about how the end of JobKeeper would affect the economy, Mr Sullivan said economic confidence was generally returning.