Hong Kong Monetary Authority (HKMA) allows banks to deal with mortgage period upper limit flexibly.
(By Ngan Lun-Lok)
The COVID-19 epidemic has stopped many economic activities in Hong Kong. Many banks have introduced bailout plans in succession, and some banks have even launched a second round of bailout plans. For example, HSBC (Hongkong and Shanghai Banking Corporation) has previously launched a "repayment of interest do not cover the principal" measure for property owners of SMEs. Yesterday, it introduced a "repayment of interest do not cover the principal" for personal customers, and a "support loan" of up to HKD30,000 for individual customers in airlines, hotels, restaurants, and retailing industries, expanding the assistance. The HKMA also make flexible arrangements according to banks' measures, allowing flexible processing of mortgage period upper limit in 30 years according to individual circumstances. The industry believes that a series of measures are expected to stabilize the property market.
The HKMA recently convened a special conference call on the banking SME loan coordination mechanism (coordination mechanism) to mention measures to deal with the economic downturn. All eight participating banks have responded to the HKMA's earlier appeal and launched a series of measures to support SMEs. Besides, all participating banks have introduced or will soon introduce bailout plans to alleviate personal financial difficulties, including allowing residential mortgage loans to temporarily suspend repayment of principals and reducing credit card borrowing costs. At the same time, participating banks also introduced relief measures for individual industries.
HSBC follows to introduce a property mortgage measure of "repayment of interest do not cover the principal."
HSBC yesterday introduced further relief measures, including the "repayment of interest do not cover the principal" arrangement for personal residential mortgage loans. From February 19 to the end of June, applicants can apply for an extension of the repayment of mortgage principal for 6 or 12 months according to the situation. And they can also apply for exemption from paying overdue fees and related interest at the same time to reduce the financial burden. To ease the financial pressure of individual customers employed in the hardest-hit industries such as aviation, hotels, catering, and retail, from February 19 to April 30, the bank will provide a "support loan" of up to HKD30,000 with the most prolonged repayment period in 2 years. Customers only need to provide a recent employment certificate when applying, and the minimum monthly income requirement is HKD5,000. It also strengthens life and medical insurance protection.
ICBC (Asia) also launched the second round of relief measures yesterday. SME financing guarantee plans can pay on behalf of the first-year premiums and provide an exemption of application fees for customers. The bank extends the repayment cycle of SME revolving loans to three or six months and provides "repayment of interest do not cover the principal" in six months for mortgage installment business. For import trade financing due on or before April 30, customers can apply for an extension of 30-day without additional fees or penalties. Besides, it provides convenient financial services to support suppliers of anti-epidemic materials.
Citigroup, which had no motion before, joined yesterday to support the anti-epidemic. The bank said yesterday that from now until August 31, it would extend the repayment period for customers of commercial banks to their existing and newly-imported import trade loans by one month. And it will temporarily delay the repayment for up to two months according to individual applications. Also, commercial bank customers can choose to convert unused credit in some trade loans into 6-month revolving credits with an upper limit of HKD10 million.
HKMC Insurance Limited: The measures can reduce the impact of the epidemic.
The HKMA has a statement regarding the arrangements of the postpone repayment of the principal for residential mortgage loans. That is, although banks must generally comply with the regulatory requirements that the residential mortgage loan period does not exceed the upper limit of 30-year, the banks can flexibly handle it according to individual circumstances on loan term if the customer has special needs. HKMC Insurance Limited also said at the meeting that they support banks in introducing measures to reduce the impact of the epidemic on SMEs and individual customers.
