Portugal’s frozen bank loan repayments are falling, withdrawals are going well



LISBON, June 30. (Reuters) – Portugal’s gradual lifting of the freeze on bank loan payments is progressing well, with arrears at very low levels and suspended payments on track, central bank governor Mario Centeno said Wednesday.

The scheme, designed to help businesses and individuals tackle the pandemic, is due to end in September, and in April, authorities began lifting some suspensions, especially those related to mortgages.

Data from the Bank of Portugal showed that the volume of loans suspended by Portuguese banks, including capital and interest, fell in May for the eighth month in a row to 38.5 billion euros from 39.7 billion euros in the previous month.

This was their lowest since April 2020.

“There is a dynamics of exit (from the moratorium), fortunately with good results. So far, the information we have received from banks suggests that the number of default cases is very low, ”Centeno told the parliamentary committee.

The payment freeze was aimed at avoiding a surge in problem loans amid the economic fallout from the pandemic.

The central bank said that private individuals suspended payments on loans worth 14.7 billion euros, or 11.7% of total loans, adding that mortgage loans account for 90% of that amount.

“Bad home mortgage loans are very low, less than 2% of all mortgages,” Centeno said.

Centeno said the monetary policy of the European Central Bank should be adapted to the development of the crisis, but warned that “the final phase of the recovery process is always more difficult as it happens when there is a reallocation of resources in the economy. “

He said it would be “a mistake on the part of politicians to prematurely withdraw support, smugly convinced of the economic recovery.” “What we have today is also due to the measures taken,” he said.

1 dollar = 0.8415 euros Report by Sergio Goncalves; Edited by Steve Orlofsky


Source link