![]() As governments and private citizens implement drastic measures to slow the spread of the virus, the resulting economic dislocation to businesses and individuals will affect a wide range of contractual arrangements, including loan agreements. Meanwhile, European credit ratings firm Scope said in a report on Thursday that it expects some payment breaks to evolve into loans moving into default. The COVID-19 pandemic has shocked financial markets around the world. ![]() Payment breaks of up to six months will also be offered to Covid-19 impacted borrowers who have yet to apply for relief. Providers will contact customers,” Mr Hayes said. “Customers do not need to contact their lender. Stylised facts: banking sector strengths and vulnerabilities prior to the COVID-19 crisis 11 2.2. The Central Bank said that provisions do not need to be set at this stage against individual loans.Īlmost 600,000 are currently receiving special Covid-19 unemployment payments in Ireland, while nearly 350,000 workers are having their pay subsidised by a Government scheme aimed at helping companies that have been hit by the crisis as much of the economy has been put into lockdown.īPFI said that banks will be “actively contacting” customers who have availed of payment breaks in the coming weeks and months about the possibility of extending their new arrangements. 2 Assessment of bank non-performing loans following the COVID-19 crisis 11. ![]() However, banks will be expected to start assessing how parts of their loan books will ultimately become impaired as a result of the economic shock and start taking loan loss provisions in their accounts. “At the end of the agreed payment break, the Central Bank expects borrowers who can return to full repayments to be given the option to either repay the loan within the remaining term or extend the term of the loan,” the organisation said.
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