The Banking and Payments Federation of Ireland (BPFI) has published its latest update on payment breaks this morning indicating that banks have extended 140,000 payment breaks in total, with mortgage payment breaks now at 78,000 and 35.8,000 SME loan breaks. 

The last update from the BPFI in mid-April noted 45,000 mortgage payment breaks and 14,000 SME payment breaks at that stage. The BPFI utilised the release to remind bank customers that the European Banking Authority (EBA) guidance is that June 30 is the deadline on issuing payment breaks, so for consumers/SMEs to engage with their banks as they reach the end of the initial 3-month payment break, to decide will they seek a 3-month extension or is there a need for a more comprehensive forbearance arrangement. 

Goodbody Stockbrokers noted yesterday that banks were already starting to engage with customers on this process.

The data from the BPFI shows that banks have now extended payment breaks to c.9% of their mortgage customers and c.18% of SME customers, up from 5% and 7% respectively in mid-April. Both the main listed banks provided updates recently in which AIB indicated that 9% and 13% of mortgage and SME customers respectively were on payment breaks (latter would be higher if added customers in CIB as well), with figures of 12% and 26% at BOI. PTSB indicated it extended loan payment breaks for 9% of customers.
 
According to Goodbody Stockbrokers, "Whilst payment breaks provide customers with some breathing space, clearly some customers will continue to struggle post the break period which is why we model a significant rise in impairments over the rest of 2020 and 2021, with potential impairment charges across the 5 main banks approaching c.€4.7bn."

Source: www.businessworld.ie