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Banks prepared to give grace period to borrowers facing coronavirus effects

SEB and LHV headquarters in Tallinn.
SEB and LHV headquarters in Tallinn. Source: Siim Lõvi /ERR

Banks in Estonia are prepared to give borrowers a grace period where needed, in response to economic effects of the coronavirus pandemic. Estonian bank LHV says it will extend an up to six-month grace period on corporate loans, though other banks have not mentioned a duration.

Swedish-owned Swedbank says that it gives its clients a grace period at all times where there is good reason, both to private and business accounts, and treats issues on a case-by-case basis.

Scandinavian-owned bank SEB applies a similar approach, adding that many private customers also have loan protection insurance.

Coop Pank said that in addition to a grace period, financing can be restructured.

LHV said that its corporate account holders continue to act responsibly, adding that forward planning was wise.

"We have received requests from companies in just the past week, with the intent to provide a grace period," said Indrek Nuume, LHV board member.

"The bank will meet the principal contributions on grace leave, and no further obligation [is needed] here," he added.

Heiki Raadik, Head of Credit Products atLuminor, said that bank solutions can be very diverse.

"[A grace period] is certainly one of these, but at the same time there are no set solutions, because there is no standard problem and there are no standard entrepreneurs. [Periods] can be three months, six months or 12 months. It is particularly important for individuals to contact us before they get in arrears with payments, where the chances of a settlement are much greater than when arrears have built up," he said.

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Editor: Andrew Whyte

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