COVID-19: What are banks doing to support families and companies?

28th April, 2020

In view of the exceptional times in which we find ourselves, the banking sector has been adopting measures to support families and companies either on its own initiative or within the scope of government incentives.

These measures will allow families and companies to overcome the tough constraints caused by the COVID-19 outbreak, both in terms of support specifically aimed at reinforcing cash and liquidity needs or through a reduction in monthly charges for banking services.

MEASURES FOR FAMILIES

‒        Moratorium on own, permanent home mortgages under Decree-Law 10-J/2020 of 26 March, which provides for: 

• Suspension of payment of principal and interest or payment of the principal component in instalments payable (maintaining only the interest payments) until 30 September 2020, with the date of the end of the loan being extended by 6 months.
• Extension, for a period equal to the validity of the measure, of loans with repayment of principal at the end of the contract that in effect on the date of entry into force of the decree-law.

This moratorium is based on legislation and applies to all customers who are in the situations provided for by said legislation.

‒        Private moratorium for natural persons, who may be residents or non-residents in Portugal, on mortgage loans not covered by the moratorium approved by Decree-Law 10-J/2020 of 26 March. This moratorium allows for suspension of the repayment of principal until 30 September 2020. Customers wishing to do so may choose to suspend payment of principal, rents and interest. The duration of the loan will be extended by a period equal to that of the moratorium.

‒        Private moratorium on consumer credit operations (e.g. personal and car loans) whose initial amount does not exceed EUR 75,000.00. The following options are possible, depending on the loan repayment conditions:

• Extension of the duration for 12 months of all loans with repayment of principal at the end of the contract.
• For loans with repayment in instalments, suspension of payment of principal for 12 months. Should customers wish to do so, they may choose to suspend payment of principal, rents and interest. The duration of the loan will be extended by a period equal to that of the moratorium.

‒        The conditions for basic service packages and mortgages in the event of a salary cut will be maintained.

‒        Facilities and discounts on signing up for package accounts which provide access to various banking services online.

‒        Exemption from fees in some digital operations, such as MBWay transfers.

‒        Exemption from fees when ordering new cards, such as contactless cards.

‒        Advances on pensions at no cost.

‒        Expansion of services covered by health insurance policies: 24/7 online or telephone medical assistance, cover of COVID-19, among other illnesses.

MEASURES FOR BUSINESSES

‒        Loan moratorium pursuant to Decree-Law 10-J/2020 of 26 March, which provides for:

• Prohibition of total or partial revocation of lines of credit contracted and loans granted, until 30 September 2020.
• Extension, for a period equal to that of the moratorium, of all loan agreements with repayment of principal at the end of the agreement, with suspension of interest payments. In this case, guarantees, provided in the form of insurances or securities, are also extended.
• For loans with the principal repaid in instalments or with partial maturity of other pecuniary instalments up to 30 September 2020, suspension of payment of principal, rents and interest payable up to the end of that period, whereby the contractual payment plan for the principal, rents, interest, fees and other charges is automatically extended for a period equal to that of the suspension. All items associated with contracts covered by the measure, including guarantees, are also extended.

This moratorium is based on the law and applies to all customers who are in situations provided for by said law.

‒        Provision of lines of credit guaranteed by a mutual guarantee company to cover cash needs:

. COVID-19 Linha Capitalizar 2018 [Capitalise 2018 line], with a total endowment of EUR 400 million.

. COVID-19 Linha de Apoio à Economia [Economy Support Line], with a total endowment of EUR 6.2 billion.

‒        Advance payment to suppliers.

‒        Exemption from commissions and monthly fees at automatic payment terminals (POS) to facilitate acceptance of low-value payments.

For concrete, detailed information on the support measures provided by each bank, please go to their websites.

For further information on government measures to support the economy, please go to the Government Portal “ESTAMOS ON”.