Having in mind the substantial impact of the current circumstances related to the coronavirus pandemic on the tourism segment, Erste Bank offers its corporate and retail clients in the tourism or related business deferral of their loan repayment for up to 12 months until 30 June 2021 at the latest. Deferral is available free of charge to clients who generated more than 50% of their annual operating income between June and September 2019. Clients can sign up for deferral by 30 June 2020 at the latest.
For the duration of the deferral period, clients do not repay their loan principal, and the Bank only charges regular interest. Depending on their agreement with the Bank and the preferences of each individual client, liabilities arising from principal maturing during the deferral period can be settled at the end of the loan repayment period or distributed between the remaining instalments maturing after the expiry of the deferral period. Depending on their preferences, clients can continue to pay regular interest during the deferral period as per the existing repayment plan, or take advantage of the option to make the payments in accordance with the dynamic of incoming payments in the tourism business, or pay them upon the expiry of the deferral period, as a one-time payment or in accordance with some other option available at the moment, depending on each individual case. The final loan repayment date can also be extended by the duration of the deferral period.
“We have received many requests from our clients in the tourism sector to defer the payment of their credit liabilities lately. We are aware that the existing situation has negative implications on their business and that the future development of the situation is very difficult to predict. For this reason, we decided to extend the deferral period for this client segment from six to 12 months in an effort to make the situation easier for them and help them cope better with the complex challenges they are currently facing”, said Christoph Schoefboeck, the President of the Management Board of Erste Bank, adding: “Tourism and related businesses play an important role in the entire Croatian economy. With their excellent performance, companies in this sector have been the driving force of economic growth in Croatia for years. We are confident that they will be able to emerge even stronger from this complex situation and continue to be the drivers of successful performance, growth, and development in the future. They have always had a partner in us, and this will not change in these difficult times or later.”
Measures Erste Bank adopted in an effort to provide extra support to its clients in the tourism sector build on other steps the bank has taken to help businesses. Several days ago, Erste Bank signed an agreement on portfolio insurance for liquidity loans with the Croatian Bank for Reconstruction and Development, establishing one of the important prerequisites for the operating realisation of new liquidity loans for exporters whose business has been affected by the negative effects of the current situation related to the coronavirus epidemic. The Bank has sufficient liquidity to provide financing to businesses for the above needs, including its existing clients and all other clients who apply for a loan from Erste Bank. Also, in cooperation with Croatian and foreign financial institutions (Croatian Bank for Reconstruction and Development, Croatian Agency for SMEs, Innovation and Investments, European Investment Fund), the Bank works to secure adequate funding sources and favourable guarantee schemes to provide corporate clients with financing under the best possible terms in the current market circumstances. It is important to underline that the final decision about the approval of such loans is made by the Bank based on its own criteria and business policies.
In addition, to cushion the negative effects of the current circumstances on the business of its corporate clients, Erste Bank temporarily, from 31 March to 30 June 2020, turned off automatic collection for loan sub-accounts for which it had been contractually stipulated. The Bank also postponed the maturity of regular interest – intercalary and deferred interest – maturing between 31 March and 30 June 2020, and will not charge statutory default interest for debts maturing between 31 March and 30 June 2020. In the period ahead, the Bank will continue its efforts to make an adequate contribution and help businesses overcome the current situation more easily.