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Hungarian solution
Compared to other European countries, the Hungarian payment delay is special in several aspects:
- solid: So far, it lasts for more than 15 months, from March 19, 2020 to June 30, 2021 with a one-time extension (the second phase started on January 1 of this year), while it has been introduced in most European countries for a period of 3-9 months,
- comprehensive: It covers all commercial credit and leasing agreements, while in most European countries it can only be used by a narrower group of debtors, often on a need-to-know basis.
- comfortable: Participation is automatic, as it applies to all loans granted before March 19, 2020, unless the debtor chooses, but in most European countries an application to participate must be submitted separately (subscription),
- generous: Deferred interest payments by banks cannot be capitalized, that is, banks cannot apply the interest rate, thus improving the net present value of the debtor’s credit transaction, which leads to deterioration of the creditor’s net present value of the credit deal, while the moratorium is neutral in this regard,
- SafeThe Hungarian rules stipulate that as a result of the suspension, the premium may not be increased at the end of this period compared to the previous period, instead the period will be extended, while in many European countries this law does not guarantee,
- SupportedThe loss of bank liquidity due to non-repayment of loans is being replaced by modified central bank liquidity instruments with the moratorium, and European examples are diverse in this regard as well.
According to MNB data
57 percent of the retail loan portfolio and 41 percent of the corporate loan portfolio were subject to suspension in September, meaning nearly CHF 200 billion in unpaid monthly payments. With this participation rate, the amount temporarily saved until mid-2021 could reach 3000 billion HUF.
The percentage of people living with the moratorium for this year, called endowment 2, is not yet known, so the final number may differ from the number above and upwards. We also heard that the moratorium is not expected to end in mid-2021: Set in October 2020 For vulnerable groups, the exit phase could continue even after the 2022 elections, and the selective extension law that was adopted last year – with a one-year extension until the middle of this year – remains in effect today.
European examples
European Banking Authority November analysis according to Cyprus, Hungary and Portugal have the highest rates of loans under freeze In the European Union, It is the lowest in Germany, Luxembourg and Latvia. However, the Cyprus and Portuguese examples, which appear to be the most popular in terms of participation rates, also differ significantly from the Hungarian models, that is, in a direction less favorable to debtors:
The Cyprus moratorium, which was extended until mid-2021, had to be applied separately (delays of 30 days or less are only acceptable), and the Portuguese regime, which was extended until September 2021, was only available for housing loans and loans for education and training, they suffered from Income loss of at least 20%.
Based on our own collection, let’s look at some European examples:
- in Austria After several extensions, retail and micro-enterprise customers can take advantage of the moratorium on repayment of capital and interest until January 31, 2021 on the basis of a voluntary request, the period of which usually extends to the term of the moratorium.
- In the Czech Republic There was a proposal to extend the moratorium, but on October 31, 2020, the capital relief measure has only expired for a period of 3 or 6 months, and since then, banks have been offering similar options to their clients on an individual basis.
- Slovakia Payment deferment was available for a maximum of 9 months in banks and up to 3 months twice with other creditors in the past year, which had to be requested separately. The legislation created special protection from bankruptcy for companies.
- Poland They did not offer legal deferral of payment, but members of the Polish Banking Association offered deferment options to their clients on a voluntary basis, and for companies they still lived in for a period of 3 or 6 months.
- In Serbia The moratorium has been the closest thing to the Hungarian in that it automatically visits customers, prohibits capitalization of deferred interest payments and essentially works with extended maturity. It was first introduced for a period of three months and then was extended for two months until September 30, 2020. After that, banks will work with more unique credit facilities and credit restructuring of debtors, which are also determined by the Serbian Central Bank.
- in Romania After the extension, you can apply for the deferral until March 15, 2021, however, the length of stay in the moratorium may not exceed 9 months, and low revenue due to the Coronavirus (at least 25% for companies) is a requirement for participation.
- In Germany Between April 1 and June 30, 2020, a general ban was imposed on exclusively retail loans, with an option for a three-month extension that expired at the end of September.
- In Britain According to FCA guidelines, a 6-month total repayment moratorium is available for retail loans, which can be used until July 31, 2021, in two 3-month installments, the first by March 31, 2021 at the latest. Businesses are protected in the first place by stopping the termination of real estate leases.
- in France A standard moratorium has not been implemented, but a mandatory ban on termination and enforcement has been imposed to protect debtors during emergency periods, and banks have made voluntary commitments to credit facilities.
- In Italy By September 30, 2020, the law declared a general moratorium on loan payments to small and medium-sized enterprises, and deferral options available to the public, such as borrowers for their first homes, have been extended. The moratorium on small and medium-sized enterprises was extended in mid-2021, and in many cases, on the basis of bank obligations, it is possible to suspend the repayment of capital and the use of the exemption.
The highest percentage in Europe Small and medium enterprises that are considered most vulnerable, and commercial real estate loans The largest use was by large firms to improve liquidity. For families The unsecured consumer loans were under a higher deferment rate than mortgages (This is also supported by the galactic data below). Among the sectors exposed to the Coronavirus, Hospitality, education and entertainment The proportion of loans affected by the moratorium in Europe in 2020 was on hold.
Címlapkép: Slawek Staszczuk / Loop Images / Universal Images Group via Getty Images
