Erste Bank Enables Loan Repayment Deferral of Up to 12 Months for Clients in the Tourism Sector

Considering the significant impact of the current circumstances related to the coronavirus pandemic on the tourism segment, Erste Bank has enabled its clients, businesses, and individuals engaged in tourism activities or any other dependent activities related to tourism, to utilize a loan repayment deferral of up to a maximum of 12 months, and no later than June 30, 2021. Deferral can be contracted by clients who achieved more than 50% of their annual business revenue in the period from June to September 2019, and there is no fee for its use. The final deadline by which the deferral can be contracted is June 30, 2020.

During the deferral period, clients do not pay the principal of the loan, and only regular interest is calculated. Obligations arising from the principal that becomes due during the deferral period, depending on the agreement and preference of each individual client, can be transferred to the very end of the loan repayment period or distributed over the remaining installments that become due after the deferral expires. Regular interest, depending on preferences, clients can continue to pay during the deferral period, according to the existing repayment plan or using the payment option in accordance with the inflow dynamics in tourism activities, or after the deferral expires, either in a lump sum or using other available options at that moment, depending on each individual case. Additionally, the final loan repayment deadline can be extended for the duration of the deferral.

– In the past period, we have received a significant number of requests for the deferral of loan obligations from our clients in the tourism segment. We are aware that the existing situation has negative implications for their business and that it is very difficult to predict future developments. For this reason, we have decided to extend the deferral period for this segment of clients from six to 12 months, thus trying to ease their situation and help them cope more effectively with the current complex challenges. Tourism and related activities play a significant role in the overall Croatian economy, and companies in this segment have been a driving force for its growth year after year through their quality operations. We are confident that they will emerge from this complex situation even stronger and that they will continue to be leaders in successful business, growth, and development in the future. We will be and remain their partner, both in these difficult times and later – emphasized Christoph Schoefboeck, CEO of Erste Bank on this occasion.

The measures that Erste Bank has implemented to provide additional support to clients in the tourism sector are a continuation of proactive efforts aimed at assisting businesses.

A few days ago, Erste Bank signed an agreement with the Croatian Bank for Reconstruction and Development on portfolio insurance for liquidity loans, thereby achieving one of the essential prerequisites for the operational realization of new loans to preserve the liquidity of businesses – exporters, whose operations have been affected by the negative effects of the current situation related to the coronavirus epidemic.

The bank has sufficient liquidity to finance businesses for the stated needs, both for existing clients and for all other clients applying for a loan at Erste Bank. Additionally, in cooperation with domestic and foreign financial institutions (HBOR, HAMAG, EIF), the bank strives to ensure adequate sources of financing and favorable guarantee schemes, which will, in the current market conditions, enable businesses to obtain financing as favorably as possible. It is important to emphasize that the decision to approve such placements is ultimately made by the bank, based on its own criteria and business policies.

Furthermore, in order to alleviate the negative impacts of the current circumstances on the operations of businesses, Erste Bank has temporarily, from March 31 to June 30, 2020, excluded automatic collection on loan batches for which it was contracted. Additionally, it has postponed the due date of regular interest – intercalary and interest during the deferral – that becomes due from March 31 to June 30, 2020, and will not charge statutory default interest for debts due from March 31 to June 30, 2020. The bank will continue its efforts in the upcoming period to provide adequate contributions and enable businesses to more easily navigate the current situation.

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