Debt Restructuring in the Banking Sector Due to the Effects of the Coronavirus
The Polish Bank Association (ZBP) argued in its statement of 16 March 2020 that changes would be needed in the banking sector (link to the ZBP statement: https://www.zbp.pl/Aktualnosci/Wydarzenia/Komunikat-ZBP-w-sprawie-dzialan-pomocowych-podejmowanych-przez-banki).
Below we set out the offers prepared by individual banks over the past week.
Santander Bank Polska
Individual clients who have difficulty repaying their obligations on time because of the epidemic may apply to defer repayment of the capital instalment of cash loans and mortgage loans for a period of 3 or 6 months. This means, however, that clients are still obliged to pay the interest on the loan according to the schedule. A similar solution is also available to entrepreneurs who:
- have a working capital loan, an investment loan, a kredyt biznes ekspres or a kredyt biznes ekspres hipoteka,
- have no arrears on credit products, or arrears of less than 89 days,
- have no active enforcement attachments.
Current account overdrafts are the exception: here the bank has decided to defer the repayment date automatically by 2 months (with no need to conclude a written annex).
Details of the offer on the Bank's website: https://www.santander.pl/koronawirus-aktualne-informacje-banku
Credit Agricole Bank Polska S.A.
The Bank offers the option of suspending repayment of loan instalments for up to 6 months, with the loan term being extended by the number of months suspended. The agreement may be concluded orally, with no need to sign a contract. For a mortgage loan, only the repayment of capital will be suspended, and interest and insurance premiums will still have to be paid. In this case, however, the loan term will not be extended and the individual instalments will increase.
Small and medium-sized entrepreneurs, in turn, may apply for:
- suspension of the capital part or the interest part of an instalment, or suspension of the capital and interest instalment, for up to 6 months,
- suspension of the reduction of the limit on overdraft facilities for up to 6 months, with only the interest being repaid in the meantime.
Details of the offer on the Bank's website (individual clients): https://www.credit-agricole.pl/restrukturyzacja-koronawirus
Details of the offer on the Bank's website (small and medium-sized entrepreneurs): https://www.credit-agricole.pl/ulatwienia-dla-kredytobiorcow-malych-srednich-firm-oraz-agrobiznesu
ING Bank Śląski S.A.
Individual clients with a consumer loan or a mortgage loan may apply at this bank for a suspension of payments for a period of 3 to 6 months in two options (interest and insurance premium payable, or insurance premium only), but under either option the loan term will be extended. An analogous solution is available to entrepreneurs (persons running a sole proprietorship or doing business in the form of civil law, general or professional partnerships who use simplified accounting) and to Housing Communities. ING Bank Śląski also proposes a solution for entities that keep full accounts (two repayment variants, for a period of 3-6 months or 1-3 months).
Details of the offer on the Bank's website: https://www.ing.pl/aktualnosci?news_id=1104186-umozliwimy-zawieszenie-splaty-rat-kredytow-i-leasingu
mBank S.A.
mBank presents proposals for entities with "business" loans (business loan, investment loan, multi-purpose secured loan for businesses, working capital loan for businesses) and individual loans (cash loan, mortgage loan, car loan, online car loan, mPożyczka/mRaty), who may suspend payment of capital instalments for up to 6 months. The loan term will not be extended, but the capital part of the unpaid instalments will be spread evenly over the remaining instalments.
Details of the offer on the Bank's website: https://www.mbank.pl/indywidualny/kredyty/kredyty-gotowkowe/zawieszenie-platnosci-rat/
Nest Bank S.A.
Nest Bank's "credit holiday" offer allows repayment of capital instalments to be deferred for 3 months, both for natural persons and for entrepreneurs running a sole proprietorship (those who have "businesses"). The application may be filed in traditional paper form, in electronic form or by telephone.
Details of the offer on the Bank's website: https://nestbank.pl/dla-ciebie-i-rodziny/bankuj-bezpiecznie-z-domu
PKO Bank Polski S.A.
PKO Bank offers the option of suspending instalments for a period of 3 months, which may cover both the capital instalment and the interest instalment. As a consequence of using this offer, the amount of the instalments still to be repaid will increase.
The bank's offer does not apply to loans with unpaid overdue debt.
Details of the offer on the Bank's website: https://www.pkobp.pl/aktualnosci/zawieszenie-rat-koronawirus/
Alior Bank S.A.
Alior's offer is addressed to individual clients with mortgage loans and with consumer loans repaid in instalments (excluding overdrafts on personal current accounts (ROR) and credit card debt, including instalment plans) and to entrepreneurs with loans governed by the "Regulations for the Provision of Credit Services to Business Clients at Alior Bank S.A." and the "Credit Regulations for the Business Taken Over by Alior Bank S.A. on 4 November 2016", including non-revolving loans and investment loans. For unsecured loan agreements, the Bank allows deferral of the capital and interest instalments on the obligation for a period of 3 months, or deferral of the capital instalments for a period of 6 months.
Details of the offer on the Bank's website: https://www.aliorbank.pl/LP/kredyty
BNP Paribas Bank Polska
In response to the difficulties arising from the current market situation, BNP Paribas offers individual clients and micro-entrepreneurs, including clients from the Agro sector (also farmers), a 3-month deferral of repayment of full capital and interest loan instalments. In that case, the interest accrued during the suspension period will be added to the remaining loan amount and spread over the remaining loan term, which will be extended by three months.
Details of the offer on the Bank's website: https://www.bnpparibas.pl/repozytorium/komunikaty/Bank-BNP-Paribas-pozwala-zawiesic-splate-rat
The Law Firm's Comment
All changes involving the deferral (suspension) of repayment of capital and interest instalments, or of capital instalments only, should be assessed positively, but bank clients must not overlook the fact that these instalments are not "cancelled": their payment is only moved in time. The solutions proposed by the banks appear to be simplified and free of formalities (for example, they allow the application to be made in a telephone conversation, through online banking or by email). Where a bank offers different variants for suspending the repayment of loan instalments, we recommend particular care when choosing whether the suspension will apply only to the capital instalment or also to the interest instalment. It is also necessary to check whether the chosen variant will in future extend the loan term or proportionally increase the amount of the instalments still to be repaid. The "exceptions" also need to be analysed, meaning the cases in which such an offer cannot be used (for example, where there are unpaid overdue instalments) and the types of agreement for which additional conditions must be met (for example, a mortgage loan). As in any matter, the time limit for filing the application is also important, and banks set it differently (it may be, for example, 3 or 5 days before repayment of the next loan instalment). This time limit must be met if the client wants to defer repayment starting from the next instalment.
