March 12, 2020 / 2:29 PM / 17 days ago

UPDATE 1-Polish president asks banks to let clients delay repayments

* Poland has reported on death from the coronavirus

* Forty-nine have tested positive for the virus in Poland (Adds more comments, details)

WARSAW, March 12 (Reuters) - Polish President Andrzej Duda asked banks on Thursday to allow clients to delay payment of loan installments for several months to offset the economic impact of the coronavirus outbreak.

“I hope that by Monday ... this will be jointly coordinated,” Duda told a news conference that was also attended by central bank governor Adam Glapinski.

In exchange, regulators could diminish banks’ burdens, Glapinski said, adding that the situation in Poland was not catastrophic and the European Union member state would not suffer a recession.

One person has died of the coronavirus in Poland and 49 people have tested positive for the virus in the country of 38 million.

Kamil Stolarski, head of equity research at Santander Bank Polska, said the measures set out by Duda could help small and medium-sized companies that are facing difficulties as a result of the coronavirus.

“Now we have a shock situation which could result in a number of bankruptcies of companies that would normally be operating quite well,” he said. “It would be beneficial for those companies and I think it would be beneficial for the banks because banks would be able to book lower cost of risk.”

Another banking sector source, who asked not to be named because of the sensitivity of the matter, was less optimistic.

“It opens a Pandora’s box,” the source said. “I think the matter is quite delicate and potentially could open unrealistic expectations which could have consequences for the stability of the banking sector.”

The development ministry announced a package of measures on Tuesday to help shield companies from the economic effects of the coronavirus.

On Thursday, Finance Minister Tadeusz Koscinski announced plans to increased the limit on contactless card payments to 100 zlotys ($25.62) from 50 zlotys to decrease the number of cash payments.

$1 = 3.9037 zlotys Reporting by Marcin Goclowski and Alan Charlish; Editing by Joanna Plucinska

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