Standard Chartered said on Monday it would allow mortgage borrowers and small businesses facing financial burdens to pay only interest on their loans for up to a year, as it became the latest lender to outline its plans to offer relief to Hong Kong companies hurt by the coronavirus outbreak.
The bank said individuals in good standing on their mortgage payments for the past year would be able to apply beginning March 1 for six months of interest-only payments, which could be extended for up to one year.
Small- and medium-sized enterprises (SMEs) holding business instalment loans or loans under two government-sponsored schemes would be able to apply for interest-only payments for six months and renew it for up to another six months ending September 3. It would also waive fees for certain business customers.
Standard Chartered said it would waive late fees on credit cards between March 1 and May 31, and fees on local electronic fund transfers during this period.
“Hong Kong is facing unprecedented challenges amid the outbreak of the novel coronavirus and a slowing economy,” the bank said in a statement on Monday. “As banks play an important role in Hong Kong, Standard Chartered Bank (Hong Kong) Limited is launching a series of relief measures to help ease the financial burden on our clients during these difficult times.”
The city’s economy fell into a technical recession in the third quarter and contracted for the first time in a decade last year after months of street protests. As the protests raged, tourists cut back their travel to the city and a variety of businesses from retailers to restaurants began to suffer.
It has been further hit by the coronavirus outbreak, which has sickened more than 40,000 people worldwide and led to at least 910 deaths, surpassing the severe acute respiratory syndrome (Sars) epidemic in 2003. Paul Chan Mo-po, the city’s financial secretary, said in a blog post on February 2 that the economy could contract again in 2020 because of the outbreak.
Since last week, Bank of China (Hong Kong), Bank of East Asia. China Citic Bank International, HSBC and its subsidiary Hang Seng Bank, ICBC Asia, the Hong Kong arm of China’s biggest lender Industrial and Commercial Bank of China and Standard Chartered have all said they would undertake measures to help consumers and small business owners.
The Hong Kong Monetary Authority, the city’s de facto central bank, has encouraged other banks to enact similar measures.
The city’s lenders offered similar relief efforts during the Asian financial crisis in 1998 and during the Sars epidemic.
On Monday, Standard Chartered outlined for the first time the details of its efforts to help struggling consumers and businesses. As part of its planned measures, Standard Chartered said new applicants for the government-sponsored SME Financing Guarantee Scheme would enjoy a 50 per cent subsidy on the guarantee fee until June 30, 2022, capped at HK$50,000 (US$6,439) per client.
It would also fast track the applications process for the SME Financing Guarantee Scheme and the SME Loan Guarantee Scheme up to a maximum of HK$3 million.
Regulators in mainland China have also encouraged banks to take special measures to help companies and individual customers who find themselves struggling as a result of the outbreak, including extending credit and cutting interest rates to companies facing difficulty.
More from South China Morning Post:
- HSBC to provide US$3.9 billion in additional relief to Hong Kong businesses hit by coronavirus outbreak
- Banks, insurers join Alibaba, Tencent in donating to efforts to fight coronavirus outbreak