Loan portfolio subjected to COVID moratoria drops significantly

Negligible risk that loans subjected to COVID moratoria will become non-performing when grace period ends, Central Bank report finds

22 November 2021, 10:19am
by Kurt Sansone

1 min read

There were €80 million worth of loans still subjected to a moratorium in July, a significant decline from €285 million in April

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Loans enjoying a repayment moratorium because of COVID-19 stood at €80 million in July, a significant decline from €285 million in April, a Central Bank analysis shows.

The share of loans subjected to a moratorium is equivalent to 0.6% of the total loan portfolio of the 11 banks that granted such concessions.

The analysis is found in the Central Bank of Malta’s Interim Financial Stability Report 2021 and covers the period until July.

When the COVID pandemic struck in last year, the Central Bank stepped in, calling on banks to give clients in difficulty a moratorium on loan repayments as a breathing space. The vast majority of moratoria are set to expire by the end of 2021.

The CBM deems the risk of loans becoming non-performing upon expiration of moratoria as “negligible in terms of both probability of occurrence and impact”.

Kurt Sansone is Executive Editor of MaltaToday. He was formerly deputy editor of MaltaTod...