Bendigo and Adelaide Bank said it would look at repossessing the assets of Great Southern loan defaulters in order to recoup costs.
"These are full recourse loans and we have full recourse to recover any residual outstanding amount and that could ultimately lead to repossessing a borrower's house or car. We are reserving our full rights under the terms and conditions of those loans," Bendigo and Adelaide Bank head of investor relations Will Rayner said.
Rayner said other actions could be taken, including compound penalty interest where borrowers would be liable for any costs and expenses incurred by the bank. He said credit agencies could be notified, or the bank may be entitled to take possession and sell a borrower's interest in the scheme itself.
"That in itself may trigger adverse tax consequences for the loan," Rayner said.
Rayner said investors should contact the bank if they are unable to meet payments.
"The terms and loan conditions of those loan contracts remain binding and we reject strongly any suggestions to the contrary, so those people that are choosing not to pay should be," Rayner said.
As reported by InvestorDaily in August, Bendigo and Adelaide Bank had set up a specialist team to work internally on the Great Southern portfolio and while there has not been any action against loan defaulters, Rayner wouldn't rule it out in the future.
"It's too early in the process for this to have occurred yet, but it's the bank's intention to use all of its rights," Rayner said.
In August, the bank said it was owed about $550 million by 8200 Great Southern investors with an average loan size of about $67,000.
Meanwhile, law firm Slater & Gordon are still receiving calls from Great Southern investors who are interested in joining a class action.
"We are waiting for the second meeting of investors, which is taking place in November, to make further progress," Slater & Gordon associate Ben Whitwell said.
