Covid-forborne EU loans sour faster as more exit moratoria

Exposures classified as stage two rose 37% in the first three months of 2021

Bank loans that benefited from Covid-induced payment holidays in the European Union are souring at a faster rate as more of them exit forbearance, casting a shadow on lenders’ post-pandemic recovery, data from the European Banking Authority (EBA) shows.

As of March 31, €674.2 billion ($798 billion) of bank loans in the bloc had exited the EBA-compliant moratoria, up 16.4% in three months. Exposures classified as ‘stage two’ under accounting standard IFRS 9 – meaning default risk has increased

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