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Wednesday, Jul 08, 2020

HSBC to provide US$3.9 billion in additional relief to Hong Kong businesses hit by coronavirus outbreak

HSBC to provide US$3.9 billion in additional relief to Hong Kong businesses hit by coronavirus outbreak

HSBC said on Sunday that it will provide more than HK$30 billion (US$3.9 billion) in additional liquidity relief to Hong Kong businesses pressured by the effects of the coronavirus outbreak on the city's economy.The bank, one of three lenders authorised to issue currency in the city, said it would
HSBC said on Sunday that it will provide more than HK$30 billion (US$3.9 billion) in additional liquidity relief to Hong Kong businesses pressured by the effects of the coronavirus outbreak on the city's economy.

The bank, one of three lenders authorised to issue currency in the city, said it would now allow taxi and public light bus operators to make interest-only payments for six months and borrowers of property-secured commercial loans to do so for up to one year if they apply by June 30. HSBC had been providing similar relief to small and medium-sized enterprise customers since September under two government loan schemes set up following months of street protests in Hong Kong.

Trade finance customers will be able to apply to convert part of their loan facility into an overdraft facility worth up to HK$10 million for six months to help with payroll and other operational needs. The bank is also extending import trade loans set to mature between February 10 and the end of April with no additional fee or penalty for customers with a sound trade finance record.

The new measures by HSBC come a day after ICBC Asia, the Hong Kong arm of China's largest lender, Industrial and Commercial Bank of China, became the seventh local bank to say it would provide relief measures to business owners.

"Our community needs every bit of help at this unprecedented time," Diana Cesar, chief executive, Hong Kong at HSBC, said. "We are committed to supporting our customers and will introduce more initiatives that will provide near-term relief."

The coronavirus outbreak, which is believed to have originated in Wuhan in Hubei province, has infected more than 37,000 people worldwide and killed at least 813 people, matching the number of deaths as a result of the severe acute respiratory syndrome (Sars) epidemic in 2003.

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The latest epidemic is already starting to weigh on Hong Kong's economy, which contracted for the first time in a decade last year as it was battered by months of anti-government protests. Finance chief Paul Chan Mo-po warned last weekend the economy could also contract in 2020 as the outbreak hits the bottom line of retailers, restaurants, hotels and other businesses.

Hong Kong's lenders offered similar relief measures to SMEs in the city during the Asian financial crisis in 1998 and during the Sars epidemic.

On Saturday, ICBC Asia said mortgage-loan customers could apply before August 10 to make interest-only payments for up to six months if they have been in good standing for a year. Borrowers with serious difficulties also could apply for a waiver on late-payment penalties.

To help medical staff and people infected or facing quarantine, ICBC Asia said it would waive or reduce penalties for late payment of credit cards, as well as exempt their annual fees.

The bank also said it cut fund subscription fee to 1 per cent for customers who buy fund products of HK$10,000 or more until March 31 and offer a 2.08 per cent savings rate for certain new account openers through February 28.

Bank of China Hong Kong, Bank of East Asia, China Citic Bank International, Hang Seng Bank, a subsidiary of HSBC, and Standard Chartered have all said they would undertake measures to help consumers and small business owners since Thursday.

The Hong Kong Monetary Authority has encouraged other banks to take similar actions.

Mainland China's banks have also been urged by regulators to take special measures to help companies and individual customers who find themselves struggling, including extending credit and cutting interest rates to companies facing difficulty.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.
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