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CBA customers dipping into savings and tightening belts

Matt Comyn has told MPs one of the biggest drivers of stress across lending books is unemployment.

Matt Comyn has told MPs one of the biggest drivers of stress across lending books is unemployment. Photo: AAP

Young home owners who bought during the COVID-19 pandemic are pulling back their spending sharply as interest rates rise and cost of living pressures persist.

Commonwealth Bank of Australia head Matt Comyn has told a federal parliamentary inquiry many households are clearly feeling the strain, hauling in their discretionary spending and dipping into savings.

Mr Comyn said a third of pandemic era first-home buyers had reduced their spending by more than 30 per cent year-on-year.

The bank boss echoed his counterparts from ANZ and NAB, who have told the inquiry the number of households failing to make repayments on time is still very low by historical standards.

Mr Comyn said one of the biggest drivers of stress across lending books is unemployment.

“By far the biggest increase in terms of the reason why someone will be unable to continue making repayments is a change in the employment circumstances,” he said on Thursday.

“The employment market remains very strong and the vast majority, almost all of our customers, continue to work.”

He also flagged scams as a key threat and said protecting customers was a top priority.

The head of Westpac is also expected to front the inquiry on Thursday after NAB and ANZ appeared on Wednesday.

The big four banks control about 80 per cent of the Australian market.

Treasurer Jim Chalmers said on Wednesday it was important banks passed on interest rate increases to savers as they had been raising rates for borrowers.

He said he had met bank chiefs to ensure they talk to customers facing hardship as interest rates on their loans rose.

“I’ve made sure in my conversations with the CEOs that there are the appropriate provisions in place for banks to be accommodating where they can to help people through what is a difficult time,” he said.

– AAP

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