The entities associated with CECA, including CaixaBank, Kutxabank, Abanca, Unicaja Banco, Ibercaja Banco and Liberbank, have already decided to adhere to the Code of Good Practices promoted by the Government to act in a coordinated manner in the renegotiation of the customer debt with guaranteed financing.
In this way, they argue in a statement, they will contribute to seeking financial solutions to freelancers and viable companies that have suffered a deterioration of its solvency as a consequence of the pandemic, and that have debt guaranteed by the Official Credit Institute (ICO) and
other public bodies.
The objective is that all Spanish financial institutions sign up to this code, once the sector and the Government have managed to agree on the method for restructuring the debts of companies and SMEs, with reductions agreed by the bank, and not mandatory as initially intended Economy.
The CECA board of directors, which also represents Cajasur Banco, Caixa Ontinyent and Colonya Pollença, have agreed that all their entities join the Code of Good Practices, which opens the door to extend loan maturity, assess debt conversion backed by participative loans and even the possibility of applying removes to reduce the main slope.
However, the granting of these measures will be carried out in accordance with the internal risk management policies and procedures of the different entities, requires a statement.
A coordination mechanism is also established between the entities financial institutions that have exposure to the same self-employed person or company, with in order to ensure uniform treatment.
The management of the old boxes insists that the objective is to preserve the solvency of the businesses and considers that their participation is a new example of public-private collaboration to support the business fabric in post-pandemic recovery.
CECA entities approved 342,236 loans with ICO endorsement until the end of April, which made it possible to grant financing for an amount of 37,439 million.
The Council of Ministers approved the creation of this code last May 11 and, although adherence to it is voluntary, with the idea of encouraging the participation of all entities, the Government will publish the list of those that sign up and of those that don’t.
The Executive gave a period of one month for the banks to communicate if they are added and the entities associated with CECA have been the first in announce it.
In order to strengthen the solvency of companies, the Ministry of Economic Affairs established an extension up to 10 years of expiration of loans with State guarantee, the maintenance of the guarantee if are converted into participating loans and restructuring by applying
you get rid of debt.
For the granting of these grants, it will be necessary that before 1 December 2022, the financial institution and the client reach an agreement renegotiation of all debt, guaranteed and not guaranteed, which maintains the company with the bank and that was generated after the outbreak of the
The reduction may be 50% of the principal guaranteed pending each operation, if the fall in the turnover of the company or self-employed in 2020 it was less than 70% and up to 75% of the amount guaranteed if the Turnover drop in 2020 was greater than 70%.
In all cases, to qualify for these transfers, the company or self-employed must have registered a drop in billing in 2020 30% and the profit and loss account must have presented a negative after-tax result in 2020.
Financial entities must assume the proportional part of the reduction of the loan, and the payment of the transfers will be made by order of communication, having as a limit the established funds for each of the agencies that have granted guarantees: 2,750 million
for those of the ICO; 100 million for Cesce guarantees and 150 million for endorsements managed by Cersa.
15,000 million more in ICO
The announcement of the adhesion of the old savings banks to the Code of Good Practices occurs the same day that the Government approves a new € 15 billion tranche of the Institute’s guarantee line Official Credit (ICO) approved by the Government to support investments in environmental sustainability and digitization.
The Executive created this new line of guarantees in the summer of the year past to boost investment activity and due to the high use of the previous line of guarantees of 100,000 million euros, which was designed to meet the liquidity needs of companies such as consequence of the crisis generated by the Covid-19 pandemic.
This month, the Government decided to extend up to ten years of amortization of guaranteed loans, compared to the previous eight. Besides, also it was approved that customers and banks could extend the grace period beyond the initial two years.
The bank has granted 126,000 million euros of financing, with public guarantee of 96,000 million euros, in one million operations formalized, 98% with SMEs and the self-employed.