Hong Kong is on the verge of its first recession in a decade, weighed down by the prolonged U.S.-China trade war and months of anti-government protests that have spread across the territory, disrupting traffic, scaring away tourists and paralyzing shopping areas.
HSBC, the biggest bank operating in Hong Kong, said it would offer a six-month interest rate rebate on loans approved under official financing and loan guarantee schemes for small and medium enterprises (SMEs), fee subsidies for applications for the financing guarantee scheme, and reductions in transaction fees for businesses using HSBC’s mobile payment service.
The London-headquartered lender did not quantify how much the measures will cost it. It is the only large lender in Hong Kong to have come up with the measures recently.
While HSBC offered fee subsidies for the financing guarantee scheme last year, its larger support packages for SMEs have come during times of significant economic stress for Hong Kong.
The last time the bank launched a package of SME support measures was in 2009 following the global financial crisis, according to a bank spokeswoman, and the time before that was in 2003 as the city was hard hit by the SARS outbreak.
Hong Kong is HSBC’s single biggest market, accounting for 52% of the bank’s $12.4 billion in first-half pretax profits this year.
SMEs account for over 98% of local enterprises and around 45% of total employment, Terence Chiu, HSBC’s head of commercial banking in Hong Kong, said in a statement on Wednesday.
“We have spent time listening to our customers and have heard their voices at this difficult time,” Chiu said. The statement did not refer to the political protests directly.
The Hong Kong Retail Management Association, which represents more than 8,000 businesses, urged all landlords last week to halve rents for six months and warned if the situation continued “many retailers may have to sack staff”.
Reporting by Alun John; additional reporting by Jennifer Hughes; Editing by Kim Coghill and Muralikumar Anantharaman