“The MNB clarifies moratorium issues” – an analysis published under this title central bank website. In addition to analyzing Portfolio's calculations yesterday, the analysis provides some example calculations, as well as some new or lesser-known information:
- Households and companies receive a $ 3600 billion installment deferral by the end of the year, and debtors are somewhat better off with the moratorium as they pay the bank less money at their present value (a recent Portfolio analysis noted earlier),
- of this $ 3,600 billion, capital repayments will amount to about $ 3,150 billion, while interest and fees will be close to $ 450 billion (the Portfolio estimates that two thirds of this comes from the general public and one third from companies),
- the MNB's own moratorium on the repayment moratorium on the Growth Credit Program provides assistance to 25,000 small and medium-sized enterprises on outstanding loans of HUF 1,000 billion,
- in case of an average home loan with an outstanding principal of HUF 10 million (10 years remaining, 4.5% APR), the debtor would have to pay nearly HUF 1 million in installments (of which HUF 340 thousand is interest) this year, with the household, the customer is now $ 70,000 better than the amount they continue to pay, considering the time value of the money,
- in this particular example of the MNB, beyond the moratorium, an extension of 5 months is needed to prevent the initial installment from rising (ie the evenly spread portion of the deferred interest payment would fit into the original installment – this is also consistent with the Portfolio calculation),
- Central bank analysts also note that it is important to note that a moratorium can be enforced later in the year, so whoever now chooses to repay may benefit from the moratorium later, which is determined by individual situations and preferences, but objective clear vision is important .
- as far as banks are concerned, depending on how many use the moratorium may have a liquidity impact of around $ 3,000 billion, the MNB will, in any event, provide the liquidity needed for the operation of the sector through a renewed set of instruments and liquidity-enhancing measures,
- large corporate loans available after the expansion of coverage will increase liquidity by almost HUF 2,600 billion, while open-ended securities will add more than HUF 7,000 billion. Thus, banks will be able to raise funds worth HUF 9,600 billion from the Central Bank,
- as far as banks' income is concerned, the moratorium has no material effect on the profits, since the interest is payable to debtors, the loss here for banks is due to the fact that the monthly interest payments due, which receive a deferral of payments,
- there is no loss on the repayment of the principal, since the outstanding principal is not reduced by the deferral but begins to decline again after the moratorium. Thus, banks may suffer a loss of about HUF 50 billion due to interest losses of nearly HUF 450 billion,
- after the moratorium expires, interest is paid evenly, so that the interest received on the deferral is not paid by debtors, and the loss is the time value of money. This is less than 10 percent of the $ 600 billion seen in the banking system in recent years, so it does not threaten to maintain the strong capital position of the banking system in the future,
- this is important, according to the MNB, because it will require strong lending activity to quickly recover from the outbreak.
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