Portugal’s frozen bank loan repayments down, withdrawal going smoothly
LISBON, June 30 (Reuters) – Portugal’s phasing out of bank loan repayments freeze is progressing well, with bad loans at very low levels and suspended repayments falling, central bank director Mario said on Wednesday. Centeno.
The program, designed to help businesses and individuals weather the pandemic, is due to end in September and authorities began in April to remove some suspensions, particularly related to mortgages.
Data from the Bank of Portugal showed that the volume of suspended loan repayments by Portuguese banks, including principal and interest, fell in May for the eighth consecutive month, to 38.5 billion euros from 39 , 7 billion euros the previous month.
This was their lowest rating since April 2020.
“There is an exit dynamic (from the moratoria), fortunately with good results. So far the information we have from the banks is that the default situations are very low, ”Centeno told a parliamentary committee.
The repayment freeze was intended to prevent an increase in bad debts amid the economic impact of the pandemic.
Individuals suspended € 14.7 billion in loan repayments, or 11.7% of their total loans, the central bank said, adding that mortgages made up 90% of that amount.
“Bad debts on household mortgages are very low, less than 2% of all mortgages,” Centeno said.
Centeno said that the monetary policy of the European Central Bank must be adapted to the evolution of the crisis, but warned that “the final phase of the recovery process is always more difficult than when reallocating resources in economies. “
He said it would be “a mistake on the part of policymakers to withdraw their support prematurely, complacently convinced of the recovery of the economy.” “The recovery we are experiencing today also exists thanks to the measures that have been adopted,” he said.
$ 1 = 0.8415 euros Report by Sergio Gonçalves; Editing by Steve Orlofsky