The bosses of financial heavyweights ANZ Bank and Suncorp Group predict Australia is likely to avoid recession, saying household finances remain resilient despite the pressure on mortgage customers from steeply rising interest rates.

After the Reserve Bank on Tuesday raised rates and flagged more increases this year, fanning fears of possible recession, Suncorp chief executive Steve Johnston on Wednesday said its banking customers still had significant buffers.

Almost a third of Suncorp’s bank customers were more than a year ahead of their repayments, he said, and the strength of household finances was one reason why Johnston believed Australia would avoid recession.

Even so, he acknowledged the Reserve Bank’s task of achieving a soft landing while bringing inflation under control was “incredibly difficult”.

“My base case is that we will avoid a recession. But that’s not to suggest it’s going to be an easy path,” Johnston said at Suncorp’s half-year results.

ANZ Bank chief executive Shayne Elliott also said the bank’s customers were in good shape, though he acknowledged the economy was in for a period of “pain” due to higher rates.

Loading

“At ANZ, and me personally, I don’t think it’s likely that we will have a recession, but it’s certainly possible. And the reason I don’t think it’s likely is that despite the pain and despite the pressure that many people are under, Australians have gone into this period in extraordinarily strong shape,” he said on radio station 3AW, which has the same owner as this masthead, Nine Entertainment Co.

Elliott said the number of ANZ home loan customers who were more than three months behind on their mortgage payments was “extraordinarily low”, at about 0.5 per cent of borrowers.