prijava
SARAJEVO, June 23 (FENA) - Businesses and households are allowed to exercise a moratorium on loan if they were prevented from doing business during restrictive measures introduced to prevent the spread of coronavirus pandemic, and how the economic recovery will proceed is still uncertain.
Since banks are private business entities that operate on the same principles as other private entities, the fundamental thing of every bank is to ensure self-sustainability, and then how to make a profit.
Ensuring self-sustainability is extremely important because banks work with 20 percent of their funds, and more than 80 percent are depositor funds that are taken into account because they must have security in their deposit.
In that sense, the banks, together with the regulator and with the permission of the entity banking agencies, made a step forward which enabled to help the economy and stopped all payments and obligations of all entities endangered by the coronavirus pandemic through a moratorium.
In an interview with FENA, President of Banks Association of BiH, Berislav Kutle, explains that every business entity that has no income due to coronavirus because it cannot work or a person without a salary or it is significantly reduced has the right to a moratorium for a minimum of three months and an additional two months if the situation does not calm down.
“This was done so that the entities could make income, and then when the pandemic passes, a mechanism will be made to return the funds in the simplest and most optimal way, either by increasing the installment or extending the repayment period, as it suits each client best,” Kutle explained.
With bank revenues falling by almost 20 percent in the first three months of this year, Kutle said banks expected a drop of even more than 20 percent, and bank profitability will fall by more than 50 percent, which is also planned for this year.
This is not a surprise because when the effects of the pandemic appeared, it was not known how long it would last, Kutle emphasizes, but, he says, it was known that there would be a drop in income and that it would affect the profitability of banks this year.
“But, the most important is that the banks remain self-sustainable and manage to do what they were formed for, and that they can lend to the economy and the population according to the dynamics and opportunities that the economy and the population will look for,” he added.
In Bosnia and Herzegovina, there is no data on how many economic entities requested a moratorium, but Kutle emphasizes that it is possible to calculate which economic branches were prevented from working, and that is mostly the area of tourism and transport.
However, how and how quickly economic entities will recover after the moratorium and collect income depends on the external environment, the European Union and beyond, because if economic entities outside BiH do not revive and economic entities from BiH will not be able to work and export normally, then the recovery within BiH will be much slower.
“Nobody has a magic wand. With the dynamics with which the world is improving, this dynamic will be maintained positively or negatively in BiH as well, because it is all connected. Only after the New Year will it be possible to see more realistically what situation awaits us in 2021,” concluded President of Banks Association in BiH Berislav Kutle in an interview for FENA.
(FENA) A. B.
