Bulgarian banks extend loan payment moratorium

SOFIA, July 14 (Reuters) – Diligent borrowers hurt by the coronavirus crisis can apply until the end of September to delay payments on consumer, company and mortgage loans by six months, the Bulgarian National Bank said on Tuesday.

The moratorium on bank loan payments was introduced in April and was expected to last until the end of the year, but the central bank agreed with a proposal by commercial banks to extend the scheme until the end of March 2021.

Borrowers who have not already applied will be able to negotiate with lenders to delay payments on both interest and the principal, or only on the principal.

Banks will also allow postponement on revolving credits.

Over 90,000 people in the Balkan country of 7 million have lost their jobs since mid-March and many businesses have suffered from closures and disruption of supply chains due to the pandemic. Bulgaria has so far recorded 7,411 cases of the illness, with 276 deaths.

Banks have already rescheduled payments on over 80,000 loans with a total value of 6 billion levs ($3.5 billion), which accounted for almost 10% of banks’ credit portfolios, the Association of Banks in Bulgaria said in a separate statement.

“For the Bulgarian banks this shows the serious success of the scheme aimed at helping borrowers amid a pandemic,” it said.

The central bank has already asked Bulgaria’s 19 banks, two thirds of which are owned by European Union (EU) banking groups, to cancel dividend payouts and take back funds held at parent banks to bolster liquidity and equity during the crisis.

Source: Read Full Article