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HK bank relents on loan repayments
By Kelvin Wong |
February 6, 2009, Friday
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Print Edition
Print Edition
STANDARD Chartered Plc will extend repayment periods for about 20 percent of its Hong Kong mortgage clients, as rising unemployment threatens to prevent some from meeting the terms of their loans on time.
The extensions will be rolled out in the middle of this month, Cathy Kwong, a Hong Kong-based spokeswoman for Standard Chartered, said in a phone interview yesterday. Radio Television Hong Kong earlier reported the plan on its Website, citing Ben Hung, chief executive of the group's Hong Kong unit.
Hong Kong banks face a slowing economy and pressure on margins after the city entered its first recession since 2003. Standard Chartered, which makes most of its profit in Asia, and rivals are also bracing for a potential surge in bad debt after the city's jobless rate climbed to a 15-month high and bankruptcies surged to the highest level since the Severe Acute Respiratory Syndrome epidemic in 2003, Bloomberg News reported.
Mortgages covered by the government-backed insurance program or those with loan terms that began less than six months ago won't be eligible for repayment extensions, Kwong said.
HSBC Holdings Plc, whose local unit has the biggest mortgage market share in Hong Kong according to realtor Centaline Property Agency Ltd, "has no plan to proactively approach clients to extend their loan terms," spokeswoman Vinh Tran said yesterday.
The number of Hong Kong homeowners with apartments worth less than their mortgages quadrupled in the fourth quarter, the Monetary Authority said.
The extensions will be rolled out in the middle of this month, Cathy Kwong, a Hong Kong-based spokeswoman for Standard Chartered, said in a phone interview yesterday. Radio Television Hong Kong earlier reported the plan on its Website, citing Ben Hung, chief executive of the group's Hong Kong unit.
Hong Kong banks face a slowing economy and pressure on margins after the city entered its first recession since 2003. Standard Chartered, which makes most of its profit in Asia, and rivals are also bracing for a potential surge in bad debt after the city's jobless rate climbed to a 15-month high and bankruptcies surged to the highest level since the Severe Acute Respiratory Syndrome epidemic in 2003, Bloomberg News reported.
Mortgages covered by the government-backed insurance program or those with loan terms that began less than six months ago won't be eligible for repayment extensions, Kwong said.
HSBC Holdings Plc, whose local unit has the biggest mortgage market share in Hong Kong according to realtor Centaline Property Agency Ltd, "has no plan to proactively approach clients to extend their loan terms," spokeswoman Vinh Tran said yesterday.
The number of Hong Kong homeowners with apartments worth less than their mortgages quadrupled in the fourth quarter, the Monetary Authority said.
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