Australia's largest bank expects the Delta outbreak will cause an influx of loan deferrals and warns businesses are wanting realistic answers about when lockdowns will ease.
Both the retail and business arms of the Commonwealth Bank have issued concerns around the rising financial pressure placed upon the economy while more half of the population are impacted from shutdowns.
CBA's retail banking executive Angus Sullivan said roughly 2000 repayment deferrals across mortgage and personal lending were being lodged with the bank a week, in light of the prolonged NSW lockdowns.
Mr Sullivan said since Australia's third COVID-19 wave, around 7000 CBA customers had requested financial hardship programs.
"We're very confident that a lot of people have seen the support," Mr Sullivan said.
"We're relatively comfortable that the level of demand that we're seeing at the moment is probably a pretty good indicator of what it could look like into the future."
Industry-wide, the Australian Banking Association has recorded 15,000 loan deferrals since July 8, with the number expected to increase when it releases its August data.
Mike Vacy-Lyle, the chief executive of CBA's business banking division, said uncertainty around the timeline of the greater Sydney lockdown was dampening confidence within the economy.
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Mr Vacy-Lyle said the economy in the past six months had boomed before the recent shutdown, which had assisted firms to initially cope with the virus interruption
"We went into this with cupboards reasonably full ... but we are worried about how long it is going to last," Mr Vacy-Lyle told The Canberra Times.
"The sense is that confidence is very low right now. It has deteriorated."
He also agreed realistic lockdown end dates based on vaccination targets would create more certainty, particularly for sectors such as hospitality which are relying on government advice to begin planning for the return to normal trading.
"When we make these snap calls it has a very damaging effects on businesses," Mr Vacy-Lyle said.
"We forget about that these people keep perishable goods in fridges."
CBA's most recent financial results shows business lending grew by an additional $11 billion.
That number has been supported by schemes such as the instant asset write-off, which has spurred an increase in asset finance.
Mr Vacy-Lyle commended the federal government on the extension of the IAW and new pandemic support schemes which have replaced JobKeeper.
"The extension of the instant asset write-off was a good call by Canberra," he said.
"In my view, what they have put in play is actually quite effective."
He also noted the economic rebound would be strong once a national approach to the ending of border closures was reached.
"When we get to that magic number, whether that is 70 or 80 per cent ... and we do open, I think the recovery is going to be very strong," he said.
CBA in its outlook for the 2022 financial year said labour shortages would dent the recovery.
This was being driven by international border closures, preventing skilled migration from filling jobs sectors where there are shortages.
"We need to open borders to get certain skills in," Mr Vacy-Lyle said.
