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HONG KONG, Oct 16 (Reuters) - Nine major banks in Hong Kong
have agreed to adopt a number of measures to support small and
medium enterprises in Hong Kong, the central bank said on
Wednesday, as four months of anti-government protests start
taking its toll on local businesses.
The banks will "proactively consider" allowing SME customers
facing difficulties to extend or reschedule repayments, and will
not change the terms of loans to the real estate sector even if
landords offer retailers reduced rents, it said.
The Hong Kong Monetary Authority (HKMA), the city's central
bank, announced the measures after meeting the nine banks, which
it did not name, under the newly established "Banking Sector SME
Lending Coordination Mechanism".
Hong Kong's largest banks include HSBC, Bank of
China (Hong Kong) and Standard Chartered.
Hong Kong, which has been rocked by often huge and violent
protests against what is seen as Beijing's tightening grip on
the city, is facing its first recession in a decade.
The economy shrank 0.4% in April-June from the previous
quarter, and conditions have sharply deteriorated since then.
Retail sales in Hong Kong were the worst on record in
August, down 23% from the previous year, the Hong Kong
government said earlier this month.
The Chinese-ruled territory's leader Carrie Lam in her
annual policy speech in the legislature on Wednesday offered no
direct olive branch to protesters, hoping instead to ease
resentment by building public housing.
The HKMA said if banks revised repayment terms to support
borrowers for a short period, they would not have to categorise
the loan as "non-performing" or set aside funds in case the
borrower was unable to repay.
The latest move comes after the central bank on Monday cut
the amount of cash that banks must keep as reserves, releasing
an extra HK$200-300 billion ($25.5-38.2 billion) into the
broader economy.
"We understand that the operating environment of SMEs is
very difficult amid the current economic downturn, said Mary
Huen, chair of the Hong Kong Association of Banks, an industry
group.
"Therefore, banks have introduced various measures to
support the SMEs with the government."
(Reporting by Alun John; Editing by Sumeet Chatterjee and David
Evans)
