Table of Contents

COVID-19 Update

Impact Assessment

Retail Deposits

Total Consumer Loans

Mortgage Loans

Credit Card Loans

Other Consumer Loans

Appendix

Supplementary Data

Definitions

Methodology

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Retail Banking in Australia: Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have significantly impacted the global economy, with key stock markets across the world losing 20-50% of their value year-to-date. Many economists and institutions have cut their forecasts, with many experts predicting the potential onset of recessionary environments.

A similar trend is expected in Australia as well, as economic growth is expected to register a dip in the first quarter of 2020 and will decelerate further if this disease continues to spread over the coming months. The decline will have an adverse impact on all sectors including retail banking.

This report focuses on the impact of the Coronavirus outbreak on the economy and the retail banking industry in Australia. Based on our proprietary datasets, the snap shot provides a detailed comparison between pre-COVID-19 forecasts and revised forecasts of total mortgage, consumer, credit card loan balances as well as deposit balances in terms of value and growth rates. It also offers information on measures taken by the government to combat Coronavirus.

Scope

- While still early days, indicators suggest that short-term bank profits will go down, loan growths will stall, impaired loans will begin to rise, and the retail banking sector will see further consolidation.
- The government’s efforts to provide temporary income to the millions thrown out of employment will work in the short term and hold down the impaired loan ratio for the first half of 2020, but pressure will be on lenders for many months following. However, we will also see an increase in the use of automatic digital decisioning on loans from Australian banks.
- Given the expected scale and length of the disruption to the Australian economy, it’s no surprise that key banking indicators will suffer. However, government stimulus measures for the banking sector and broader economy will limit the fallout.

Reasons to Buy

- Make strategic decisions using top-level revised forecast data on the Australian retail lending and deposits industry.
- Understand the key market trends, challenges, and opportunities in the Australian retail lending and deposits industry.
- Receive a comprehensive insight into the total consumer loans in Australia, including mortgages, personal and credit card loans as well as retail deposits balances.