Slovak banks agree to loan deferrals of up to 9 months -finance minister

Adds details, background

PRAGUE, April 3 (Reuters) - Slovak banks have agreed to defer loans and mortgages by up to nine months to help those affected by measures implemented to curb the coronaries outbreak, Slovak Finance Minister Eduard Heger said on Friday.

The agreement creates another line of assistance after the government approved on Tuesday a 834 million euro ($899.72 million) aid package for companies and workers hit by the coronavirus crisis.

"The goal of this aid is to achieve that nobody would lose a roof over their head," Heger said, adding that the deferrals will be offered to individuals, entrepreneurs and businesses with up to 250 employees.

Under previously approved steps, the government will offer bank guarantees of up to 500 million euros a month, and pay 80% of wages for employees at firms forced to shut.

It will also offer financial support to self-employed people and employees in companies that suffer falling revenue, with payments linked to the revenue drop.

The loan deferral will not affect clients' credit history. It is subject to government and parliamentary approval.

"We are ready, as a banking sector, to support the country and to stand up for our customers," Alexander Resch, president of the Slovak Banking Association, said.

The banks had not demanded the abolition of a bank sector tax as a condition of the deal, Prime Minister Igor Matovic, who came to power last month, said.

Some commentators had urged the government to abolish the additional tax on bank profits - introduced in 2012 to build a buffer against potential future crises in the euro zone country - to persuade lenders to agree to loan deferrals.

Slovakia, which has a population of 5.5 million, has so far reported 450 cases of the coronavirus. Most shops and restaurants have been closed as part of measures to contain the virus's spread while a number of factories, including the country's four car plants, have idled production.

The central bank has predicted that Slovakia's economy will contract by between 1.4% and 9.4% this year while the unemployment rate could rise to 7.5% to 10% from the current 5%.

($1 = 0.9270 euros)

(Reporting by Tomas Mrva, Writing by Robert Mueller, Editing by Susan Fenton)

((robert.muller@thomsonreuters.com; +420 234 721 615; Reuters Messaging: robert.muller.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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