Following months of unrest triggered originally by attempts to push through an extradition bill, Hong Kong’s central bank gathered with the city’s major lenders to demonstrate sympathy and agree on a serious of measures to support small and medium-sized enterprises.
The Hong Kong Monetary Authority (HKMA) completed its first «Banking Sector SME Lending Coordination Mechanism» meeting which was attended by nine major banks (HSBC, Standard Chartered Bank, Bank of China (Hong Kong), Citibank, Hang Seng Bank, Bank of East Asia, DBS, ICBC Asia and CCB Asia) alongside representatives from the Hong Kong Association of Banks (HKAB) and the Hong Kong Mortgage Corporation (HKMC).
According to the HKMA, SMEs are a major pillar of the Hong Kong economy and banks should be sympathetic to those facing financial headwinds, noting that the sector moving forward «will not withdraw credit lines hastily to take other credit action that will adversely affect the customers’ business operations».
Pro-SME Measures
According to the HKMA, banks agreed upon a series of measures to support SMEs including favorable loan conditions (extensions, rescheduled payments, reduced fees, interest rate rebates); easing of credit access (supporting trade war-related supply chain restructuring, easier new account opening); and more.
One issue highlighted was whether loans rescheduled under the current initiative would be classified as «rescheduled loans» and therefore be marked as a non-performing asset. The HKMA explained that such moves are unnecessary if a bank is proactively revising the repayment terms and they are commercially sound, no such reclassification is required.
