With HBOR’s Portfolio Insurance, More Than 5.2 Billion Kuna in Liquidity Loans

By utilizing HBOR’s portfolio insurance faster and simpler approval of new funds for maintaining the liquidity of exporters and indirect exporters has been enabled.

According to pre-agreed eligibility conditions and insurance costs, banks will independently decide on the loans to be included in the portfolio that HBOR insures up to 50 percent of the principal amount, regular contracted interest, intercalary and start-up interest.

New liquidity loans with a grace period of up to one year and a repayment term of up to five years can be included in the insured portfolio under this program.

The insured parties under these agreements are banks that will approve new liquidity loans to exporters, including the tourism sector, as well as to indirect exporters. Exporters are defined as entrepreneurs who, in the last business year for which official financial reports are available, generated at least 20 percent of their revenue from exports.

In accordance with the amendment to the Export Insurance Regulation, which came into effect on April 30, banks will be able to use portfolio insurance for the approval of liquidity loans to indirect exporters, i.e., suppliers of exporters. Indirect exporters are defined as entrepreneurs who generated at least 40 percent of their revenue from sales to exporters in the business income of the previous financial year.

– By insuring the loan portfolio, HBOR has enabled one of the essential prerequisites to simplify and accelerate the approval process for liquidity financing. With the amendment to the Export Insurance Regulation, loans approved to indirect exporters can also be included in the insured portfolio, thereby allowing a significantly larger number of entrepreneurs to benefit from this advantage – said Tamara Perko, CEO of HBOR.

Romeo Collina, CEO of Zagrebačka banka, stated that by signing this Agreement with HBOR, they continue to support their clients who have faced a series of challenges and unpredictable liquidity pressures due to business disruptions caused by the COVID-19 epidemic.

– This Program will enable exporters in all industries to have faster and simpler access to the necessary funds and is one of the proofs of a coordinated response to market needs in these challenging times, as well as a good example of synergy between HBOR and commercial banks with the common goal of supporting our entrepreneurs. Zagrebačka banka will continue to support the efforts of the Government of the Republic of Croatia and HBOR in creating and implementing solutions to maintain our clients’ businesses and preserve jobs –  said Collina. 

Dinko Lucić, CEO of Privredna banka Zagreb, stated that since the outbreak of the COVID-19 crisis, Privredna banka Zagreb has proactively and continuously undertaken activities to assist its clients.

– We started with the first measures to assist businesses at the beginning of April. Along with the existing measures of the Bank (deferral of loan payments, loans for maintaining financial liquidity, and loan restructuring), the realization of this agreement with HBOR will further facilitate financing and operations for exporters, including the tourism sector – said Lucić.

– This crisis has directly or indirectly affected the entire economy, not only domestically but also in all global markets. However, considering the structure of the Croatian economy, expectations are that among the most affected entities will be certain export activities, which of course include the tourism sector. From the very beginning of this extraordinary situation, we have been implementing all available measures to assist the economy in direct contact with business clients, including the implementation of a loan moratorium, restructuring of loan obligations, liquidity financing, and direct forms of assistance to the healthcare sector. We welcome HBOR’s portfolio insurance program, which will make this recovery measure even more accessible to our clients in this sector – said Balázs Békeffy, CEO of OTP banka.

– We would like to express our satisfaction that we, along with several large banks, are the first small bank to collaborate with HBOR on this important Program for our exporters. In the extraordinary and challenging circumstances caused by the coronavirus pandemic, access to working capital is crucial for the functioning and survival of entrepreneurs, and through the collaboration of our Bank and HBOR, we provide our clients with a quality and secure option for liquidity financing necessary for continuing operations in foreign markets and preserving competitiveness – said Andrej Kopilaš, CEO of Slatinska banka.

Obtaining Approval from the European Commission for the Program

For this product, it was necessary to obtain approval from the European Commission primarily for the application of significantly reduced premium rates for portfolio insurance compared to market premiums.

This measure will last until December 31, 2020, and will be available to exporters from all sectors.