Chinese companies in Hong Kong take the lead to launch five measures to fight the epidemic, helping enterprises and citizens tide over difficulties.
Under the continued outbreak of the novel pneumonia epidemic, Hong Kong's economy suffered further, and the operations of SME (small and medium-sized enterprises) and the livelihoods of citizens have been affected. Chinese companies launch the first-order response, taking the lead in helping enterprises and citizens fight the epidemic. BOC Hong Kong (2388) yesterday took the lead in launching five financial services to fight the outbreak. They include mortgage of interest repayments do not cover principal for one year of the longest, and that eligible SME customers can borrow up to HKD2 million without guarantee (see table). The HKMA (Hong Kong Monetary Authority) welcomes the measures, saying that the proactive response of the banking industry will help to reduce the economic impact of the outbreak of this epidemic. It encourages other financial institutions to consider similar actions.
(by Ma Chui-mei)
To alleviate the monthly payment pressure of individuals and industrial and commercial customers who are more affected by the epidemic, BOC Hong Kong said yesterday that mortgage customers could apply for repaying the interest do not cover the principal for six months. But these customers must have paid back for one year or more and have a regular repayment record in the past year. Besides, BOC said customers could apply for an extension for another six months after the expiration, that is, up to 12 months. Macau previously allowed mortgage customers to repay interest do not cover principal for half a year of the longest. In Hong Kong, for the time being, only BOC Hong Kong has introduced a deferred loan arrangement, which has been extended to one year.
SMEs can borrow HKD2 million without guarantee to against the epidemic.
This bank also launched a particular anti-epidemic loan program for SMEs, provides green approval channels for qualified customers, arranges express loan approvals which complete within one day of the soonest, and withdraws within three days. Also, the mortgage handling fees are free, while customers only can borrow up to HKD2 million, with the most extended repayment period up to 60 months. Customers participating in the SME financing guarantee scheme or SME credit guarantee scheme through the bank can apply for interest repayment do not cover the principal for six months. They also can apply for an extension for another six months, that is, up to 12 months without repayment of the principal.
The Assistant President (Banking Supervision) of Hong Kong Monetary Authority, Chen King-Wang said yesterday that the outbreak of novel pneumonia severely hits the Hong Kong economy, and personal and corporate customers of the bank have been affected, especially SMEs. Banks are welcome to introduce temporary relief measures to help customers get through current difficulties. He encouraged other financial institutions to consider similar actions. He pointed out that, in line with the principles of prudent risk management, authorized institutions can actively consider requests for temporary relief arrangements from borrowers facing financial difficulties due to the novel coronavirus.
Standard Charted Bank studies bailout plans to help customers in hardship.
Affected by the epidemic, the China Banking and Insurance Regulatory Commission previously requested that mainland Banks delay the repayment period and supply priority insurance claims for the affected people. In Hong Kong, BOC Hong Kong takes the lead in introducing anti-epidemic measures. There are concerns that if other Hong Kong banks will follow.
Standard Chartered Hong Kong said yesterday that it is also studying different bailout plans to assist customers with financial shortfalls or financial difficulties to ease their financial pressure. Details will be announced later. HSBC said it would make appropriate arrangements based on specific circumstances, and pointed out that HSBC Insurance had previously introduced special protection against the novel coronaviruses for life insurance customers and their families.
Cho Tak-Ming, the Senior Vice President of mReferral Mortgage Brokerage Services, believes the mortgage loan default rate (over three months) has maintained at 0.02% to 0.03% in recent years, lower than 1% that appeared during SARS in 2003, plus after 2009 the HKMA has tightened the upper limit for the mortgage percentage and implemented stress testing, so the borrowers' financial status is mostly stable. He believes most customers using service of interest repayment do not cover principal are SMEs of service industries such as retail, catering, and tourism hotels that are currently affected. Because the related SMEs may have to sell properties for financing due to cash flow problems. But not many people are expected to use these measures.
Some banks may follow. The impact will be positive.
Cho Tak-Ming also points out that large local banks are currently introducing the relevant measures. He believes that some banks will follow in the short term, which will have a positive impact on property prices in Hong Kong, ease the current social climate, and reduce the primary pressure on SMEs.
BOC Hong Kong's five measures:
◆ Property mortgage interest repayment does not cover the principal. Eligible customers can apply for interest repayment do not cover the principal for this half-year. After the expiry, they can apply for an extension for another six months, that is, up to 1 year without repayment of the principal.
◆ A special loan program for SMEs to fight the epidemic. Eligible customers do not need to provide guarantee and can borrow the highest of HKD2 million under special interest rates without loan handling fees, with the repayment period up to 60 months.
◆ Support for the supply of anti-epidemic materials. Priority will be given to account opening, global remittance, payment settlement, and donation related to the procurement of anti-epidemic materials, and all service charges will be free.
◆ Extension of expired premiums and extra protection. The grace period for people who are failing to pay the premiums of the designated life insurance plan as scheduled extends to June 30; Insurant of personal insurance policy will receive additional protection if confirmed of infection by the novel coronavirus.
◆ Providing fee concessions or exemptions. People can apply for exemption of related penalty interest, interest, and late payment fees if they fail to pay mortgages, personal loans, and credit card loans on time due to particular circumstances.
Tabulator: Journalist Ma Cuimei
