The share of SEB Banka’s clients in arrears due to rising loan interest rates is less than 0.5 percent, SEB Banka CEO Ieva Tetere told LETA.
In her opinion, it might be necessary to help those people whose monthly loan payments exceed 40 percent of their household income. This would be 8-10 percent, or 2,000 of the bank’s 24,000 clients. The bank is already reaching out to its struggling clients, reviewing the terms of their loan agreements and finding solutions.
“Having reviewed 10 percent of our clients’ loans this year, we can conclude that the bank is managing very well,” Tetere said.
In total, SEB Banka has reviewed the rates for around 900 clients in the last year, while 120 have had their loans restructured, which means that there were financial problems.
As for the amendments to the Consumer Rights Protection Law, which are currently in the process of adoption and will reduce interest payments, Tetere said that the law has not been properly developed and it is difficult to see how banks will be able to implement it.
Tetere said that the new law will oblige the banks to reduce interest rates at clients’ request. In the case of SEB Banka, there will be 24,000 customers filing their applications. Tetere pointed out that the bank would not be able to respond to 24,000 customers’ requests at once. Also, the bank’s IT systems are not designed for such a solution, which means that SEB Bank’s entire system, which is the same in all three Baltic countries, will have to be reprogrammed, Tetere said.
She explained that the bank’s system would have to be overhauled to try to register a fixed rate instead of a variable rate, contracts with all 24,000 mortgagors would have to be renegotiated, it would have to be agreed when a return to the previous rate would take place, etc. In Teter’s view, this would create huge instability and the bank would not be able to provide this immediately to its 24,000 borrowers.
“At a time when the country is in a state of great instability because of the geopolitical situation, with two wars, damaged gas pipelines and communication cables, bomb threat letters being sent to schools and kindergartens, the public is already irritated and anxious. We will give the public another reason to worry because the bank is not answering, cannot pick up the phone, so they will feel that there is also instability in the financial sector,” Tetere said.
“Do politicians really want to make the country even more unstable?” the bank’s CEO asked rhetorically, adding that the proposed amendments to the law are a step towards doing just that.
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