Moratorium sought for 6,000 household loans during pandemic peak

Central Bank of Malta data shows that there were 7,327 household and commercial loans subject to a moratorium by end April for a value of €1.3 billion

Household loans valued at €491.2 million were subjected to a moratorium at the height of the pandemic in April
Household loans valued at €491.2 million were subjected to a moratorium at the height of the pandemic in April

At the peak of the COVID-19 pandemic in April there were 5,656 household loans subjected to a repayment moratorium, figures out today show.

This represents a mere 8% of all loans held by households, indicating a high resilience among families when compared to commercial sectors.

The figures come from the Central Bank of Malta’s economic update released on Thursday that shows how 7,327 loans across different sectors were subjected to a moratorium by the end of April. The total value of these loans stood at €1.3 billion and they constituted 11.3% of all bank loans.

Although banks had started giving moratoriums on loan repayments when the pandemic struck to ease liquidity problems, government eventually legislated on the matter to allow people to seek loan moratoriums of up to six months.

The vast majority of loans subjected to a moratorium were household loans, at a value of €491.2 million.

But significantly, the household loans subjected to a moratorium only accounted for 8% of the total loan portfolio held by households.

This contrasts with the accommodation and restaurant sector, where 41.1% of all outstanding loans held by operators in this industry were subjected to a moratorium.

This was the hardest hit sector as a result of forced closures and a travel ban that stopped tourism in its tracks.

The CBM report shows that there were 322 loans valued at €174.2 million in the accommodation sector that were subjected to a moratorium.

The construction industry, which remained operative throughout the pandemic, also showed resilience with 87 loans valued at €30.2 million subjected to a moratorium. These loans amount to a mere 5% of loans held by this sector.

Loans subject to moratorium by end April

Sector Volume of loans Loan amount Share of sector loans
Households 5,656 €491.2m 8%
Manufacturing 114 €34m 16%
Construction 87 €30.2m 5%
Wholesale and retail 398 €68.3m 10.1%
Transportation, storage, communication 66 €29.6m 11.9%
Accommodation, food services 322 €174.2m 41.1%
Real estate 310 €181.9m 19.1%
Other 375 €246.2m 13%
Total 7,327 €1.3b 11.3%

Source: Central Bank of Malta

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