Portfolio insurance for more than HRK 5.2 billion
Zagreb, 5 May 2020 - Zagrebačka banka, Privredna banka Zagreb, OTP banka and Slatinska banka signed with HBOR the Portfolio Insurance Agreement for Exporters’ Liquidity Loans – COVID-19. These banks, together with Erste banka and Hrvatska poštanska banka that signed this Agreement a few days ago, enabled the granting of altogether more than HRK 5,2 billion in liquidity loans covered by HBOR’s insurance.
The use of HBOR’s loan portfolio insurance facilitates and accelerates the granting of new funds for maintaining liquidity of exporters and indirect exporters.
In accordance with the in advance agreed eligibility criteria and insurance costs, the banks will independently decide on the loans to be included into the portfolio insured by HBOR up to 50 percent of the amount of principal, regular contracted interest, interest during disbursement period and interest during grace period.
New liquidity loans with a grace period of up to one year and a maturity period of up to five years may be included in the insured portfolio under this programme.
Beneficiaries of insurance under these Agreements are the banks that approve new loans for liquidity to exporters, tourism sector included, and to indirect exporters. Exporters are defined as business entities that have generated at least 20% of their income from exports in the last business year, for which the official financial statements are available.
Pursuant to the amendments to the Export Credit Insurance Regulation that came into force on 30 April, the banks will be able to use portfolio insurance also for approving liquidity loans to indirect exporters, i.e. exporters’ suppliers. Indirect exporters are defined as business entities that have generated at least 40% of their income from sales to exporters in the last financial year.
“HBOR’s loan portfolio insurance created one of the major conditions for facilitating and accelerating the procedure of approving funds for financing liquidity. Amendments to the Export Credit Insurance Regulation introduced the possibility of including loans to indirect exporters into the insured portfolio, which enables a significantly larger number of entrepreneurs to make use of this benefit”, said Tamara Perko, President of the Management Board of HBOR.
“Since the outbreak of the COVID-19 crisis, Privredna banka Zagreb (PBZ) has been proactively and continuously undertaking a series of activities to help its clients, and we started with the first measures intended to help businesses in early April. In addition to the Bank's existing measures (deferral of loan repayment, loans for liquidity and rescheduling of loans), the implementation of this Agreement with HBOR will further facilitate exporters’ funding and operations, tourism industry included”, pointed out Dinko Lucić, President of the Management Board of Privredna banka Zagreb.
This product required the approval of the European Commission, primarily to apply significantly lower premium rates for the portfolio insurance in relation to market premiums.
This measure will remain in effect until 31 December 2020 and will be available for use by exporters in all sectors.