Payment holidays shield banks in 2020, deterioration very likely in 2021, Moody’s says
The high level of loan payment holiday in Cyprus may shield the banks in 2020 but suggests that asset quality deterioration is “still very likely next year,” rating agency Moody’s has said.
In its bi-weekly Credit Outlook issued today, Moody’s said that according to data published by the Central Bank of Cyprus as June 5 around one-third of Cyprus banks` gross loans had payment deferrals, adding to banks’ credit risks.
“Although the payment deferrals reduce the probability of acute asset quality stress this year, the high percentage of deferrals suggest that asset quality deterioration is still very likely next year,” the rating agency said, adding that the deferrals will reduce the extent of any deterioration, but their ultimate effect will depend on the depth and duration of the economic downturn.
(CNA)
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In its bi-weekly Credit Outlook issued today, Moody’s said that according to data published by the Central Bank of Cyprus as June 5 around one-third of Cyprus banks` gross loans had payment deferrals, adding to banks’ credit risks.
“Although the payment deferrals reduce the probability of acute asset quality stress this year, the high percentage of deferrals suggest that asset quality deterioration is still very likely next year,” the rating agency said, adding that the deferrals will reduce the extent of any deterioration, but their ultimate effect will depend on the depth and duration of the economic downturn.
(CNA)
*The full text of the news item is available in the paid version of the CNA web service. Subscription Form
*CNA reserves the copyright to the news stories it files, which is granted to subscribers for specific use only.
from Cyprus News Agency
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