EU loans under Covid moratoria have high credit risk – EBA

The share of European bank loans subject to Covid-induced payment holidays that have deteriorated in creditworthiness is twice that of total loans, data from the European Banking Authority (EBA) shows. This implies that borrowers currently subject to relief measures may struggle to honour their obligations when these expire.

The watchdog found that €871 billion ($1.03 trillion) of bank loans were granted EBA-compliant moratoria as of June 30. Exposures classified as ‘stage two’ under IFRS 9

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