KUALA LUMPUR, Nov 23 — Malaysian banks remain committed to assisting its customers and borrowers post-automatic blanket moratorium which ended on Sept 30, particularly those who continue to be affected financially.
CIMB Group Holdings Bhd group chief executive officer Datuk Abdul Rahman Ahmad said given the recent resurgence of COVID-19 cases, the bank recognises that it is even more crucial now to render financial assistance to affected individuals, especially those who have lost their income or whose income has been significantly reduced, and to business customers whose operations have suffered an adverse impact. “Accordingly, CIMB has extended its payment assistance programmes until June 2021 to give customers an extended period of time to recover.
“Further, in line with the government’s recent announcement on the expanded assistance to the bottom 40 per cent (B40) income group and microenterprise borrowers, CIMB will be offering its expanded targeted payment assistance programme which involves a deferment of monthly instalments for a period of three months or a 50 per cent reduction in monthly instalments for the next six months to these segments,” he told Bernama.
He said post-blanket moratorium, CIMB has reached out to and engaged with over 400,000 borrowers, of whom around 75,000 customers have accepted the repayment reliefs offered with an approval rate of virtually 100 per cent.
CIMB is urging all customers who are in need of financial assistance to get in touch with the bank and they could be assured that assistance will be given and that if they opt to agree to such assistance, there will be no impact to their CCRIS (Central Credit Reference Information System) status.
Abdul Rahman said it is optimal that assistance to borrowers is done in a targeted manner to ensure funds and resources are specifically channelled to individuals and companies in need, including the affected small and medium enterprises, and the individual borrowers from the B40 and middle 40 per cent (M40) income segments.
A further blanket moratorium would have allowed everyone, even those with high disposable income, to benefit from payment relief, which is not productive in the current environment, he said.
“It is important for those who can afford to resume their payments to do so, to avoid incurring higher costs and taking a long time to repay their debt.
“At the same time, it is critical to ensure the banking system remains healthy and has the liquidity from repayments from its borrowers in order for the banks to finance new productive lending to help fuel economic recovery,” he said.
He also noted that a blanket moratorium incurs a significant cost to banks, which have already been impacted by lower income and elevated provisions given the challenging COVID-19 environment.
“Depositors and shareholders of banks, which predominantly are institutional investors that manage funds on behalf of contributors or the public such as Permodalan Nasional Bhd (PNB), Employees’ Provident Fund (EPF) and Retirement Fund Inc ( KWAP), need to be assured that banks can remain profitable to provide returns for the benefit of the rakyat.
“This is why it is crucial to migrating to a targeted repayment assistance approach,” he said.
Abdul Rahman noted at the present juncture, CIMB Group has a clear policy of paying out 40 to 60 per cent of its net profit as dividends.
“Nevertheless, visibility on the financial performance for financial year 2020 still remains low. With capital management and conservation as a priority, the board will make a decision at the completion of the financial year on the quantum of dividends, if any, depending on the operating conditions at that point in time,” he added.
UOB Malaysia managing director and country head of wholesale banking, Ng Wei Wei, said as a commitment to assist its customers, the bank has taken proactive measures reaching out to them to offer assistance in assessing their financial position ahead of the expiry of the blanket moratorium period.
Following that, she said, UOB Malaysia has arranged further consultations to discuss payment plans and other arrangements that would be better suited to their specific circumstances where needed.
Among the targeted assistance that the bank currently offers are allowing customers to pay only the interest portion of the loan/financing over a period of time, lengthening the overall period of the loan/financing to reduce monthly instalments, and providing other forms of flexibility until they are in a more stable position to resume repayments in full, she said.
As part of the measures announced during the recent Budget 2021 presentation, she said UOB Malaysia will also be expanding its targeted repayment assistance to all customers categorised in the B40 group who registered under the Bantuan Sara Hidup (BSH) or Bantuan Prihatin Rakyat (BPR) and eligible microenterprises with loans or financing facilities amounting up to RM150,000.
“It is uncertain as to how long or how profound the impact of the COVID-19 pandemic will be. While some customers have been managing relatively well given the circumstances, others will need further support.
“UOB Malaysia stands by our customers, as we have done all these years, and we will continue to prepare them for the recovery to come,” Ng said.