22,230 applications for borrowers’ moratorium in first month

05/11/2020 / Press release

Banka Slovenije can report that during the first month that the new law was in force (to the beginning of May), banks received 22,230 applications from borrowers for a moratorium on repayments, equivalent to 3.3% of total loans. Our assessment is that future developments in the number of applications will depend primarily on the possibilities for reigniting the economy afforded by the coronavirus situation.

The end of March saw the entry into force of the Emergency Deferral of Borrowers’ Liabilities Act (the ZIUOPOK). The law provides for a moratorium on credit liabilities for firms, sole traders, cooperatives, farmers, and other individuals. Previously an option that could be agreed between bank and borrower, loan restructuring has been made mandatory by the law. Banks have to allow all those in difficulties caused by the outbreak of the crisis to defer their repayments.

Banka Slovenije is monitoring the implementation of the law. The figures available after the first month of the law being in force (to 1 May to be precise) reveal that banks and savings banks received 22,230 applications for a moratorium on repayments.

Figure 1: Number of applications received and total amount of liabilities deferred

  Number of applications for moratorium on repayments Total amount of liabilities deferred, EUR thousand
Households 15,599  33,149
Micro enterprises and sole traders 3,454  41,828
SMEs 3,020  114,628
Large enterprises 154  77,596
Total 22,227  267,201

Source: Banka Slovenije

We can also report that the 22,230 applications for a moratorium on repayments cover an amount equivalent to 3.3% of the total loans that borrowers hold with banks. Moratorium applications were submitted for 2.9% of total household loans, and for 5.1% of total corporate loans.

Banka Slovenije can also clarify that the EUR 267 million of deferred repayments, which is the total amount of deferred liabilities according to the latest figures, is in essence cashflow that the banks will not receive during the moratorium period; it will be received later, after the end of the moratorium.

We should add that the aforementioned law allows households and businesses until the end of this year to claim a moratorium. It is therefore impossible to predict the final amount of loans that will be subject to the law based on the applications received to date. Our expectation is that applications in the coming months will depend primarily on the timing and pace of the restarting of the economy allowed by the coronavirus situation.