Loan Portfolio Assessments and Climate Risks
Banks whose clients are exposed to the super El Niño cycle building in the Pacific Ocean are assessing loan structures and loss risks, with debt rescheduling among the options being considered. Spain's Banco Bilbao Vizcaya Argentaria SA has asked local risk teams to review loan books across Peru, Argentina and Colombia as extreme weather combines with global warming. Measures for vulnerable customers may include debt rescheduling and agricultural loan repayment holidays, supported by data generated for management processes.
Regulatory Pressures and Portfolio Exposures
European Union-based banks face regulatory pressure under Pillar 3 disclosure rules to report climate-related risks, according to Bloomberg Intelligence. Lenders such as Standard Chartered have asked bankers to conduct granular risk assessments across corporate and investment banking portfolios, incorporating physical risks into client-level reviews. Meanwhile, CaixaBank noted that while sensitive exposures represent about 60% of its lending to agriculture, livestock farming and fishing, the sector accounts for less than 1% of its total lending portfolio, limiting overall physical risk exposure.