Private Bank Moratoriums Expire by the End March: What Does That Mean?

Private moratoriums are coming to an end, what are the figures, and what are banking insiders saying about it.

The financial lifeline that came in the form of bank moratoriums is coming to a close for some in just two days. Private bank moratoriums end on March 21, 2021, and while the Bank of Portugal (BP) hasn’t made public the exact figures differentiating public and private moratoriums, here’s what we do know. 

By January of this year the total loan repayments that were put on pause by the moratoriums (public and private) represented €45.7 billion, Idealista reports. €24 billion worth were granted to non-financial companies and €20 billion to private individuals. Of the moratoriums for individuals €17.1 billion encompassed mortgages, and €3.7 billion of that fell under the private moratorium label, according to the news outlet.

It’s unclear what portion of the €24 billion moratoriums granted to non-financial companies are private, but we do know that €8.4 billion (34.4%) were granted to companies that function in the sectors that the state labeled as the most vulnerable, Público reports. 

Those who were able to gain access to the state sponsored public moratoriums will be covered until the end of September. 

Related: More Time to Pay the Piper: Portugal Extends Debt Moratorium

Concerns about the impact the end of the private moratorium will have on thousands of families have been voiced for some time now. Banks began contacting mortgage holders who benefited from private moratoriums since the beginning of the month. They informed them that they would resume mortgage installments in April, and in the case they were unable to begin paying, they negotiated restructuring payment plans, according to Idealista

The president of Caixa Geral de Depósitos, Paulo Macedo, warned that there may be a ‘tsunami’ of non-performing loans coming our way once the moratoriums end, as reported by Público. Macedo urged that there must be other systems of support put into place for sectors that were greatly impacted by the crisis, making reference to tourism which in essence was brought to a halt by the pandemic. 

Business associations, labor unions, and Deco (the consumer protection association) defend that the period to access moratoriums, as well as the ones already granted should be extended, Público reports. They argue that moratoriums have provided families and businesses with a much needed “bubble of oxygen” that is keeping them afloat. 

However, the president of BP and former finance minister, Mario Centeno, doesn’t appear to be very concerned over the upcoming moratorium expiration date and says the country can’t prolong moratoriums, according to Público. Centeno argues Portugal can’t be the only country to prolong them, as he says “In many countries there are no more moratoriums and I see no specificity in Portugal for us to isolate ourselves in this sense, I really do not see it,” the periodical reports.

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