April 3 (SeeNews) - The Serbian unit of Hungary's OTP banking group has recorded a 35% year-on-year drop in the number of applications for new loans in March due to the coronavirus crisis, OTP Banka Srbija CEO Predrag Mihajlovic said.
"Customers are cautious and do not wish to take on more debt," Mihajlovic said during a video conference broadcast live on the YouTube channel of Serbia's managers association on Thursday.
The main goal of OTP Banka Srbija during the coronavirus crisis will be to ensure the continuity of operations of existing corporate customers, because in the current situation the lender cannot launch any aggressive credit strategy, Mihajlovic said.
Banks in Serbia plan to use financing that will be guaranteed by the state to finance companies that were creditworthy as of February 28, Mihajlovic noted.
"Therefore, there will be no misuse of the guarantees by banks and they will not attempt to refinance non-performing loans," he explained
Earlier this week, Serbian president Aleksandar Vucic said the government is developing a financing model jointly with banks in the country under which banks will offer to the market 2 billion euro ($2.2 billion) in loans backed by a corporate liquidity guarantee fund, whereas the state will participate with a sum of 480 million euro to 600 million euro.
"The main obligation for SMEs wishing to receive a new loan under the scheme is to repay the existing obligations. We will seek growth but our main goal is to protect our existing clients," Mihajlovic said.
($ = 0.926013 euro)
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