In its third-quarter update to the market, Westpac noted its proportion of stressed assets to total credit exposures had fallen 9 basis points to 1.51 per cent since the March quarter, and Australian mortgages with 90 days delinquency or more had dropped 9 basis points to 1.1 per cent in the three months to June.
The highest stress levels were in property, hospitality and retail trade, although the proportion of stressed assets in hospitality and retail had declined significantly since September 2020. Consumer finance 90-day delinquencies had dropped to 1.82 per cent as at June 2021, down from a high of around 2.5 per cent in June last year.
Westpac’s total provisions to risk-weighted assets also fell 4 basis points over the quarter, but the bank noted it had added a $300 million exposure from the Forum Finance case as an individually assessed provision.
In the two months since lockdowns in Sydney and flow-on COVID incursions to other states began, Westpac said it had only seen a “relatively small number” of new repayment deferrals, with 3,700 home loan deferrals and 725 business deferrals.
The bank reported that its home and business lending was growing at system levels, with total consumer lending for the June quarter dropping to $14.5 billion from $15 billion in the March quarter.
