Wednesday, 18 March 2009


A mortage holiday of up to a year if you are made redundant. Thats what theCommonwealth Bank in Aussie is planning - the bank is headed by Ralph Norris.

With CBA itself predicting last month that the jobless rate could blow out from its current level of 5.2 per cent to a peak of 7 per cent late next year, Mr Norris said that it was not in the bank's interest to see people "get into trouble".

"In the case of those unfortunate to be unemployed, we will provide repayment holidays for six months, and in some circumstances up to 12 months, with interest being capitalised," he said. Mortgage holders will ultimately have to pay the deferred payments, plus interest.

Mr Norris added that he could not rule out job losses at CBA because of deteriorating economic conditions.

The rest of the story in the Australian here

We think its time for the banks on this side of the Tasman to step up with someone similar.


Anonymous said...

this isn't a good idea BB, it just encourages borrowing amongst those in risky positions

PM of NZ said...

Definitely not a good idea. Just putting off the day when the piper has to be paid.

I say let them fold. If you cannot pay your bills without further credit, you are already insolvent.

Upset shareholder said...

If they didn't take out redundancy insurance on their mortgage, they should get on with life. As a shareholder in the bank I find it unreasonable to support someone without appropriate financial insight with my capital. If the recession is as deep as many are predicting, a six or twelve month repayment and interest capitalisation holiday will just be adding to the money we won't get back when a mortgagee sale is required.

PS I don't agree with government supported corporate welfare, such as is happening with AIG, either!

Adolf Fiinkensein said...

What a bunch of illiterate fuckwits you have here, RP. Norris has very specifically referred to people who are made redundant, not people who can't pay their bills.

Of course he also owns ASB in NZ so you can expect the same sensible philosophy to flow on to this side of the Tasman.

Anyway, it's what the banks do now when a client is made redundant. Provided the account has not been delinquent it is common practice for banks to give some breathng space by capitalising interest and suspending regular principal repayments for three months or until the client has found a new job.

PM of NZ said...

Hoo ya callin illiterate, eh boy?

Anonymous said...

Absolutely correct Adolf. Trouble with these fruit cakes is that they forget about the customer. Its give give me.
The hole in the holiday though is that it needs also apply to those that shut their businesses. Plenty there who have been good businesses who suffer from various failures of others.
If we completely destroy people we will spend the next 20 years climbing back, just like we did in the eighties. We don't need that again for the forth time in my working life.