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Croatian banks mull moratorium on loan repayment due to coronavirus - report

Author Iskra Pavlova
Croatian banks mull moratorium on loan repayment due to coronavirus - report Zdenko Adrovic, head of Croatian Banking Association (HUB)/Photo: HUB

ZAGREB (Croatia), March 11 (SeeNews) -  The head of Croatian Banking Association (HUB), Zdenko Adrovic, said that local banks are considering a freeze on loan repayment for citizens and companies affected by a reduction or cancellation of business by the coronavirus epidemic, local media reported.

The Croatian banks are actively working on identifying measures that would mitigate the impact of the virus on local businesses and population, and will propose to the government to introduce a moratorium on loan repayment with the support of a state-guaranteed scheme, news provider tportal.hr quoted Adrovic as saying during a press briefing on Tuesday.

A HUB representative will meet prime minister Andrej Plenkovic and finance minister Zdravko Maric to discuss the issue on Wednesday, Adrovic said.

According to the proposal, banks will be able to delay the repayment of certain loans by 6 to 12 months without a need to set aside additional reserves for them, because these loans would be covered by a state guarantee.

Androvic noted that some 14% of Croatia's exports go to Italy, the European country worst affected by infection, and imports from Italy account for a similar percentage of total.

He said that the coronavirus outbreak has disrupted, directly or indirectly, the supply chain of the global economy in a wide variety of sectors, and not only in car parts manufacturing.

Prime minister Andrej Plenkovic said in a statement on Tuesday that transport, and air transport in particular, is the sector most vulnerable to the impact of the novel virus, followed by tourism.

Plenkovic said the government has been in talks with all affected segments of the Croatian economy and will take all necessary measures to mitigate the coronavirus impact.

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