HK banks unveil relief measures for mortgage borrowers hit by coronavirus

Boc Hong Kong Holdings

11/02/2020 06:53

HONG KONG, Feb 11 (Reuters) - At least two banks in Hong
Kong have introduced relief measures for home mortgage borrowers
hurt by the coronavirus outbreak, in a move analysts say could
help lower foreclosures in an economy already in recession.
    Bank of China (Hong Kong)  2388.HK  and Standard Chartered
 2888.HK  have said mortgage customers may apply to pay only
interest, and not principal, for up to six months, subject to an
extension of another six months. 
    "This is an effort to relieve the pressure of making monthly
repayments for the individual and commercial customers who are
more severely affected by the novel coronavirus outbreak,
including but not limited to those in retail, food and beverage,
logistics, tourism, hospitality and entertainment industries,"
Bank of China (Hong Kong) said in a statement.
    Months of sometimes violent anti-government protests in Hong
Kong last year plunged its economy into its first recession in a
decade. Analysts predict a worse start to 2020 for the financial
hub as travel curbs to fight the spread of the virus deal a
further blow to tourism, retail and other business.
    Hong Kong Airlines, the city's No.2 carrier, has already
flagged plans to slash 400 jobs and cut operations given weak
travel demand due to the outbreak.   urn:newsml:reuters.com:*:nL4N2A7248
    The impact on Hong Kong's economy from the new epidemic
could be worse than in 2003 when it was hit by another
coronavirus, the Severe Acute Respiratory Syndrome (SARS), its
financial secretary has warned, with unemployment set to rise.
    The new coronavirus can be transmitted from person to person
and has infected more than 40,000 and claimed over 1,000 lives
in mainland China, exceeding the global toll of 800 during SARS.
Hong Kong has confirmed 42 cases of coronavirus.  urn:newsml:reuters.com:*:nL4N2AB02I
    Against this backdrop, more banks are expected to follow
suit with easing measures for mortgage borrowers to prevent
2003-like foreclosures, mReferral Mortgage Brokerage Services
Senior Vice President Eric Tso said.
    But property agents do not expect foreclosures in Hong Kong
to exceed 2003 levels, when 5,700 were recorded, as the current
loan ratio is much lower. 
    Data shows the mortgage delinquency ratio was 0.03% at
end-December, with the estimated number of residential mortgage
loans in negative equity at 128.
    Private home prices in the city, one of the world's most
expensive, eased again in December and property agents expect
the trend to continue in the next few months. urn:newsml:reuters.com:*:nL4N2A012M

 (Reporting by Clare Jim; Editing by Himani Sarkar)
 ((clare.jim@thomsonreuters.com; +852 2912 6653; Reuters
Messaging: clare.jim.thomsonreuters.com@reuters.net))