Polish bank Pekao estimates a third of its customers requested credit breaks

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GDANSK, Aug 4 (Reuters) – Polish bank Pekao estimates a third of its customers have requested breaks from making credit payments, Chief Executive Officer Leszek Skiba said on Thursday, following a government scheme announced at the end of April.

The Polish government announced then that borrowers struggling with high repayment rates will be able to take “credit breaks” and suspend repayment of a total of eight instalments in 2022 and 2023.

“What’s worth to remember is that, usually it’s the clients with credit values above the average who submit these requests, so in the end the financial toll is higher than one-third”, Skiba said at a news conference.

Pekao estimated in July that the total cost of “credit vacations” would reach 2.43 billion zlotys ($524.6 million), based on a forecast that 85% of its customer base would participate in the government scheme.

“The current dynamic shows that the estimated 85% … is very probable,” Skiba said.

Polish PM Mateusz Morawiecki said on Tuesday that 500,000 mortgage holders have already applied to take a break from payments and added that the cost of said “holidays” for the banking sector would be up to 20 billion zlotys over two years. 

Chief Financial Officer Pawel Straczynski said that the bank expects its cost of risk not to exceed the projections set in its strategy, which aimed for the cost of risk management to stay between 50 to 60 basis points. As of the end of the second quarter, the bank reported that the standard cost of risk stood at 51 basis points.

Straczynski also said the bank still plans to issue subordinated debt, under minimum requirements for own funds and eligible liabilities (MREL), of around 7.0 billion zlotys when the market situation allows.

($1 = 4.6324 zlotys)

(Reporting by Mateusz Rabiega and Adrianna Ebert; Editing by Jan Harvey and Emelia Sithole-Matarise)

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