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Portugal's frozen loan repayments decline further in January

LISBON, March 24 (Reuters) - The volume of loan repayments suspended by Portuguese banks under a scheme to help businesses and individuals through the pandemic slipped in January to 45.7 billion euros ($54 billion), further retreating from a peak in September.

The latest figure released by the Bank of Portugal on Wednesday compares with 46.1 billion euros of the so-called loan moratoriums, including capital and interest, in December and an all-time high of 48.1 billion in September.

The central bank said 54,000 companies had access to the scheme in January, for a total of 24 billion euros, or 33.2% of total corporate loans.

“The accommodation and restaurant companies were the ones that stood out the most, with 57% of their total loans covered by this measure,” it said, without giving further details.

Portugal’s once-booming tourism sector suffered its worst results since the mid-1980s last year due to the pandemic.

Private individuals suspended 20 billion euros of loan repayments, or 16% of their total loans, the financial authority said, adding that mortgage loans made up 86% of that amount.

The freeze, in part aimed at avoiding a jump in bad loans at banks that spent the past five years reducing their ratios of non-performing loans, will end on Sept. 30. Some loans, namely mortgage loans, will start paying interest as of April.

Portugal’s largest listed bank Millennium bcp wants the government to extend the loan repayments freeze for pandemic-hit tourism companies beyond September if the health crisis has not been overcome by then, Chief Executive Officer Miguel Maya said in February.

Portugal’s lenders have cut their average non-performing loan (NPL) ratio to around 5% of total credit, but it is still almost twice the European average. ($1 = 0.8462 euros)

Reporting by Sergio Goncalves; Editing by Andrei Khalip and Lisa Shumaker

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