NBU eased loan restructuring for business: what changed

The National Bank softened part of the requirements for restructuring enterprises' debts to simplify their access to financing. In particular, a short-term loan restructuring will no longer affect the definition of a borrower's default.

This is reported by News.LIVE citing Deputy Governor of the NBU Yuriy Geletyi.

According to Geletyi, the National Bank changed regulatory approaches to lending to business so that companies can more easily negotiate with banks to change service terms.

One of the key innovations concerns short-term restructuring. Now the fact of such a change in loan terms will not be taken into account when assessing whether the borrower is in default.

This gives banks more leeway to temporarily change the repayment schedule or other debt repayment terms without automatically worsening the borrower's rating merely due to the restructuring itself.

Another change concerns loans secured by local government guarantees. The NBU raised the collateral valuation coefficient for unconditional guarantees of city and regional councils to 0,8.

As explained by the deputy governor of the National Bank, this change was proposed by representatives of the banking sector and business. It is intended to make such collateral more substantial when assessing credit risks.

At the same time, the NBU does not expect a sharp acceleration in lending. Although the overall banking loan portfolio grew by about 30%, further increases in financing volumes, according to the regulator's forecast, will remain restrained due to high wartime risks.

The National Bank also emphasizes that the easing of rules does not mean a relaxation of risk controls. Banks should continue to consider the interests of depositors and creditors and assess borrowers' ability to meet their obligations.