European banks turn the page on loans under moratoria

Chart of the week

In the European Union, the amount of outstanding loans under moratoria (deferred repayment of interest and principal for individuals and companies) fell sharply from €811 billion at the end of June 2020 to €123 billion at the end of June 2021. Of the outstanding amount, 70% is concentrated in three countries, namely Italy, Spain and Portugal.

Over the same period, defaults on loans under moratoria, irrespective of expiry date, rose slightly from €23 billion in June 2020 to €39 billion in June 2021.


During the Covid-19 pandemic, loans under moratoria were the main concern in terms of banks’ asset quality. Clients who were able to benefit from them were considered as being the riskiest. However, the rapid fall in outstanding amounts and low number of defaults is reassuring. The data collected from individual banks on more recent trends is also encouraging.

The risk environment for household and corporate lending remains particularly favourable for European banks and the cost of risk can be expected to remain under control in the quarters ahead.


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The following opinion was written on October 14, 2021 and is susceptible of changing.

Sources : Bloomberg, and calculation from Lazard Frères Gestion

As of : October 14, 2021

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