Possibly one of the most gratifying details in the Commonwealth Bank’s recent quarterly earnings statement was that fewer of the bank’s borrowers, including credit card holders, remain in financial difficulty, a tribute to Australia’s strengthening economic recovery.

The number of borrowers struggling to make their monthly payments has been cut almost in half during the twelve months now past. In October 2008, as the Reserve Bank began raising interest rates to combat inflationary pressures and the global financial crisis leaned on Australia’s economy, CBA made provisions to manage the fallout amongst their customers.

Additional staff were hired to assist borrowers with debt management programs. In June 2009, 9,325 customers accessed these services, seeking help with their credit cards, personal loans, and mortgages. By October, that number was 13,299. But now, it’s fallen to 5,132.

The number of customers seeking assistance with their mortgages increased steadily during 2009 but now has begun to recede. In contrast, the number having difficulty with their credit cards has remained roughly constant over the past two quarters, and now comprises a larger percentage of the whole than mortgage holders.

CBA holds the largest portfolio of mortgages amongst the Big Four banks, and so if financial pressures are easing for one bank’s customers, it’s a good sign for the rest of the economy. Recent statistics show that the average homeowner is nine payments ahead on their monthly repayments, and 70% of all homeowners are at least somewhat ahead.

Source: http://www.smh.com.au/