SEB sees fall in requests for postponing loan repayments

Tallinn skyline.
Tallinn skyline. Source: Siim Lõvi /ERR

The number of new applicants for a moratorium on loan repayments has fallen among SEB customers. The bank has granted a grace period to approximately 3 percent of its private customers and 12 percent of its business customers, SEB said.

Allan Parik, chairman of the management board of SEB Pank, said: "From the start of the emergency situation, we have granted a moratorium on loan repayments due to circumstances caused by the coronavirus to approximately 4 percent of our private customers and 16 percent of business customers in our loan and leasing portfolio."

Parik noted that several granted grace periods have now run their course and customers have not deemed it necessary to extend them.

"The low share of customers who have applied for a grace period in our portfolio and the decline in new applications proves that our customers' financial health remains good and stable," he added.

In April, member banks of the Estonian Banking Association agreed on common rules for loan repayment moratoria for private individuals and businesses. The rules were established for both individuals and companies in order to support the smoothest possible recovery of the Estonian economy and households from the sudden crisis situation.

The common rules, which were initially planned to remain valid until June 30 have been extended until the end of September as banks wanted to continue to offer customers the confidence that they will be treated in the same way as those who have applied for a grace period due to the spread of the coronavirus.

SEB offers its customers who are experiencing temporary difficulties an option to defer their payments of the principal amount of the loan for up to a year. A moratorium of up to six months is offered for the repayment of leases and small loans.

Companies or groups whose credit limit with SEB totals less than five million euros are granted a grace period of up to six months on their principal payments.

The common procedure for granting grace periods due to the emergency situation applies to loan agreements entered into before March 12 and on the basis of which grace periods can be applied for no later than September 29. The new simplified terms also apply to customers who have already applied for a moratorium since March 12, 2020.

Applicants for a grace period under simplified terms will only have their repayment schedule changed while the rest of their contract terms remain the same.


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Editor: Helen Wright

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