By Malena Miranda
Borrowers can reschedule loans at a second time, reported the head of the Superintendency of Banking, Insurance and AFP (SBS), Socorro Heysen.
In an interview with the newspaper El Peruano, the official pointed out that the proposals to freeze debts are not necessary.
As of July this year, some financial entities showed losses. How to improve those results?
– It was predictable. The regulatory measures and facilities of the Superintendency of Banking, Insurance and AFP (SBS) made it possible for financial entities to reschedule debts, without deteriorating the credit rating of their clients and without constituting provisions at the time.
But, as the months progressed, we noticed that they recovered very few credits, such as what happened in May and June, because users had grace periods.
In July and August these credit recoveries increased significantly. There are entities that can show losses, but they also have clear options to solve those problems.
It was possible to observe debtors who never stopped paying, and others who had a couple of months of grace and then were able to meet their obligations.
– Are there any rescheduled debtors that show payment difficulties?
–In the financial system there are other debtors who will need more grace periods and will demand more work from the entities and, perhaps, some type of interest rate reduction.
The way to implement solutions for clients is in phases, which is why the SBS published the changes to the market conduct management rules, which came into effect at the end of August.
This norm grants financial companies minimum standards of work with users with payment problems, offering them relief alternatives.
These models, which are already in force, are comparable to those of European countries in the crisis of 2009 and 2010.
–What other measures will you implement in the SBS for the debtors?
–The SBS constantly reviews the standards and works with the supervised entities to solve these problems. In addition, we ask them to deliver a loan portfolio management plan to ensure that they deal with the difficulties of non-payment of their debtors. Relevant situation from the point of view of solvency.
Later, we will probably ask finance companies for a self-assessment of their capital needs to determine if that equity is sufficient, or we will ask shareholders for additional capital.
–Is it possible that a debtor can reschedule his credits again?
– Borrowers with normal ratings and potential problems (CPP) before the pandemic agreed to reprofile their loans on a massive scale for the first time; however, they can have a second reprogramming individually.
In some cases, loans could even be rescheduled more times to refine the payment situation, but not indefinitely because this would no longer be good for the sustainability of the entities.
– Could a refinanced loan be rescheduled?
–As a first point, a debtor with a recently refinanced loan cannot access a debt rescheduling, since it already has a deterioration in its rating and to reschedule debts it must have a good payment behavior and evaluation prior to the pandemic.
However, it is possible that a user with a loan refinanced for quite some time, and who has a good repayment behavior in that period, and even improved his score, could reschedule his refinanced debt.
– When would you notice a deterioration in the quality of the portfolio?
–The delinquency will be revealed gradually in the coming months. Towards the end of the year and early 2021, we should already have a clearer idea of the situation.
The important thing is to maintain technical work that preserves the stability of the financial system and not take generalized measures that could disturb the development of the situation itself.
The congressional proposals to freeze debts would cause significant damage to financial stability and savers, as well as to the payment culture, the economy and the public treasury.
That is why we repeatedly express our disagreement with these initiatives.
Changes to the rule
The head of the SBS informed that among the additional norms that they will issue is the norm on modifications to the licensing regulations, mergers and acquisitions.
This standard clearly defines the expectations of the SBS regarding shareholders, managers, business models, among others, as well as new entities or acquirers, he said.
“It gives more predictability to the admission process regarding requirements and time,” he added.
He stressed that in the guarantee programs that the Government could approve, the SBS provides regulatory flexibility as it does with the Mype Business Support Fund (FAE-Mype) and the Reactiva Peru Program.
Loan rescheduling reached 124.059 million soles as of August 28, 32% of the financial system portfolio.
Financial entities rescheduled about eight million loans. Thus, 49% of all loans were rescheduled.
The largest rescheduling is in small business, consumer and micro-business loans.
54% of 2018 profits were capitalized by financial entities last year, according to the SBS.
76% of the 2019 earnings were reinvested by financial entities during 2020.
75% of the banks’ profits in 2019 were capitalized this year.
100% of the profits of the municipal savings and credit banks in 2019 were reinvested this year.
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– Andean Agency (@Agencia_Andina) September 20, 2020