Site menu

Search by ticker code:
Generic filters


Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Improving loan book: Are CBA (ASX:CBA) shares a buy?

Are Commonwealth Bank of Australia (ASX:CBA) shares worth buying with its improving loan book?

Are Commonwealth Bank of Australia (ASX: CBA) shares worth buying with its improving loan book?

CBA’s loan book announcement

CBA has released August 2020 information relating to COVID-19 temporary loan repayment deferrals.

The biggest ASX bank said that its total number of loan deferrals was 174,000 in August 2020, down from 182,000 in July and 210,000 in June. The total loan deferral balance was $59 billion, down from $62 billion in July and $67 billion in June.

The above numbers represent 7.4% of the total number of loans of the portfolio, down from 7.6% in July and 8.2% in June. The amount of the home loan balance being deferred was 9.8% of the portfolio in August, down from 10.1% in July and 10.8% in June.

Of the total number of SME loans, 15.5% of the portfolio is being deferred, down from 16.4% in July and 19.4% in June. Of the total SME loan balance, 24.1% of the loan portfolio is being deferred, down from 26.4% in July and 28.4% in June.

CBA said that for home loan deferrals (that receive capital payment concessions), 32.6% are investment loans, 14.6% are interest only and 13.5% have a LVR (loan to value ratio) of more than 90%.

There were $5.7 billion of loan deferrals that were expired or exited in August, which is hopefully a good sign.

There were $2.3 billion of new approved or extended loan deferrals, with $1.7 billion of these an extension of an existing deferral.

CBA CEO Matt Comyn said: “Since the onset of the pandemic, our priority has been to do what we can to assist our customers in managing the challenges of COVID-19, including temporary loan repayment deferrals on approximately 250,000 home, personal and business loans. As we approach the end of the initial deferral periods, we have been contacting all customers with deferred loans to talk with them about their options, including returning to full or part payment, or converting their loans to interest only. Many of those contacted will be able to recommence their repayments. For customers who are facing financial hardship, we are reaching out to offer solutions tailored to their individual needs.”


This seems like promising news for CBA. The more it’s loan book can get back to normal, the better. But now deferrals are ending, we’ll have to see whether the ‘overdue’ mortgages ratio starts rising. House prices fell in Sydney and Melbourne during September, though the rest of the country is improving.

At this stage I’m not confident that banks are through the worst of it. That’s why I’d go for other ASX dividend shares first like defensive investment house Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) that I wrote about here.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz owns shares of WHSP.
Skip to content