Edition:
HIGHLIGHTS
Donald Trump’s China policy
NEW
US-China relationsHong Kong economy
News
Hong KongChinaEconomyAsiaWorldSportThis Week in AsiaUS Elections
Business & Tech
BusinessTech
Opinion
Latest
Lifestyle
LifestylePeople & CultureStylePostMagK-popOutdoorCooking
More +
VideoTalking PostSCMP FilmsInfographicsPicturesPodcastsSCMP SeriesExplainedSCMP SpotlightNewslettersSpecial Reports
Topics
Donald Trump’s China policyUS-China relationsHong Kong’s Article 23 national security lawChina’s militaryChina's economic recoveryTrending in ChinaTaiwanChina’s Communist PartyUkraine warWellness
Focus
Greater Bay Area
avatar image
Advertisement
Hong Kong economy
BusinessCompanies

Nine Hong Kong banks add their heft to HKMA’s coordinated financial lifeline to help small businesses survive city’s slump

  • The HKMA chaired a meeting attended by the Hong Kong Mortgage Corporation, HSBC, Standard Chartered Bank, Bank of China (Hong Kong), Citibank, Hang Seng Bank, Bank of East Asia, DBS, ICBC Asia and CCB Asia.
  • The banks agreed to a set of guidelines, similar to those during Hong Kong’s 2003 Sars outbreak, to cut small borrowers and businesses some slack

Reading Time:3 minutes
Why you can trust SCMP
0
Riot police respond with tear gas as protesters throw petrol bombs and set objects on fire during scuffles with police at the junction of Fleming Road, and Hennessy Road following an anti-extradition bill march from Causeway Bay towards Wan Chai and Admiralty on 29 September 2019. Photo: Felix Wong
Enoch Yiu

Nine of Hong Kong’s biggest lenders have pledged their support to the Hong Kong Monetary Authority’s push to help 330,000 small-and-medium enterprises (SMEs) survive the city’s business slump, as four months of civil unrest added weight to the year-long US-China trade war in driving the local economy into recession.

The nine banks, including three of Hong Kong’s currency issuers HSBC, Standard Chartered Bank and Bank of China (Hong Kong), will provide a range of measures to help SMEs, maintain their credit lines, and make good use of HK$300 billion released into the financial system this week by the de facto central bank.

“Banks attending the meeting appreciated that, given the current economic environment, some SMEs may face financial difficulties,” the Hong Kong Monetary Authority (HKMA) said in a statement on its website. “Banks will … be sympathetic to SME customers encountering financial difficulties. Banks will enhance communication with these customers and will not withdraw credit queues hastily or take other credit actions that will adversely affect the customers’ business operations.”

The banks will adhere to a set of guidelines called “Hong Kong Approach to Corporate Difficulties”, similar to those adopted during the 2003 outbreak of the severed acute respiratory syndrome (Sars), which killed 299 people out of 1,755 infected, and nearly brought the economy to a standstill. The financial lifeline comes as SMEs – small businesses that each employ fewer than 50 employees – are bearing the brunt of the economic fallout from Hong Kong’s worst political crisis in history.

Eddie Yue Wai-man speaks to the media on his first day as the Chief Executive of the Hong Kong Monetary Authority (HKMA) on 2 October 2019. Photo: Xiaomei Chen
Eddie Yue Wai-man speaks to the media on his first day as the Chief Executive of the Hong Kong Monetary Authority (HKMA) on 2 October 2019. Photo: Xiaomei Chen

Hong Kong’s economy, which shrank in the fiscal second quarter, is on track to a technical recession in the three months ending in December, as nearly 20 weeks of street mayhem and increasingly violent protests had kept visitors away and crimped retail sales.

More than 40 per cent of SMEs surveyed expect the city’s economy to deteriorate in the next 12 months, the most pessimistic out of 13 markets polled, according to Bibby Financial Services and Euler Hermes.

Advertisement