Households and businesses returned to normalcy and in fact in January they paid the installments on time, in the vast majority, after 9 months of freezing their payments. The fact that their customers returned to normal with the end of the moratorium gave a note of optimism to the banking staff that a large wave of new “red” loans could be avoided, something that seemed or still seems quite possible.
According to information gathered by “Φ”, both from the Bank of Cyprus and from Elliniki, it was an unexpectedly positive development for the customers to respond and start paying their installments normally. Of course, as mentioned by banking sources, we have to keep a small basket, because it is only a month after the lifting of the suspension and we have to see what will happen from now on. Hellenic Bank sources told “F” that the previous work done to facilitate their customers with restructuring plans, because they could not return to the normal flow of payments, but also the government's plans to support businesses and households, helped borrowers.
Outlining the environment in the midst of a pandemic and while there are still restrictions, banking circles noted that the new non-performing loans on February 1, 2021 are less than the corresponding period last year. In relation to the borrowers who come from the hotel industry and are suspended for about a year, there do not seem to be any serious problems. As mentioned, the employees are mainly foreigners who do not have loans in Cyprus or are young staff who do not yet have loan openings in banks. In the case of Cypriot workers, they are usually older, 50 or older.
Although for many sectors of business January was a lockdown month, nevertheless the picture is positive from Bank of Cyprus. Precautionary measures taken from the summer onwards with their customers, offering restructuring solutions, have taken place, according to bank circles. It should not be overlooked that a month may not be representative of what will follow and how installment payments will evolve. Regarding how many wanted to benefit from the extension of the moratorium on installments with a maximum completion of 9 months, bank sources said that there were not many cases, due to the fact that the period of nine months for most was exhausted.
According to the data of the Central Bank, in 2020 loans of € 755 million were renegotiated, showing an increase of 21% compared to 2019. The largest restructuring was presented by corporate loans over € 1 million. These restructurings amounted, in 2020, to € 468 million, compared to € 372 million in 2019. Restructuring on mortgages amounted to € 158 million in 2020, compared to € 96 million in 2019.
