By GYNNIE KERO
LAID off workers and businesses in the hospitality industry as well as the resource and transport sectors will be given relief on loan repayments, Bank South Pacific (BSP) says.
Chief executive officer Robin Fleming said the bank appreciated that with the economic downturn brought about by the coronavirus (Covid-19) pandemic, certain industries would be greatly affected with job losses and scaling down of operations.
Fleming was responding to The National yesterday to clarify doubts on a three-month loan repayment holiday.
“In regard to repayment holidays, BSP understands that businesses in certain sectors will be immediately impacted by reduced revenue and cash flow as a result of measures adopted by the government to minimise the risk of transmission of Covid-19,” he said.
“With international air travel being stopped and domestic air travel also being restricted, airlines, hotels, transport and mining services business sectors will experience downturns in trade.
“As a result and as advised to Government, BSP will provide repayment relief for businesses who have been impacted by Covid-19 downturns and individuals who have lost their job as a result of their employer experiencing downturns due to Covid-19.
“For individuals, this will include repayment holidays up to three months.
“Other banks and other lenders have also indicated there will be support for affected customers on a similar basis to BSP.
“As economic conditions change and if the effects of Covid-19 spread to other sectors, BSP will also review the sectors that may be impacted, and we will adjust the sectors to which repayment holidays apply.
“The repayment holiday at the moment only applies to businesses who have been directly affected by Covid-19 downturns or individuals who have lost their job as a result of the Covid-19 downturn.
“The Bank of PNG (Papua New Guinea) reduced the Kina facility Rate (KFR) which is a signalling rate for monetary policy last week and in response BSP reduced its indicator lending rate by one per cent with all our lending products reducing by one per cent.”
“The KFR is though only a signaling rate and not a source of deposits therefore this will have an impact on BSP’s net interest income and BSP released a statement to the PNG Exchange and South Pacific Stock Exchange to inform our shareholders,” Fleming said.
“To ensure that our variable rate loan customers receive the benefit of the lower interest rates over the next week or so we will be reducing the repayments on those variable interest rate products which include our standard housing loan, residential property investment loan, commercial property investment loan and tailored business loan. The interest rate on overdraft accounts reduces by one per cent and all new personal loans and smart business loans funded after April 1 reduce by one per cent.”
By GYNNIE KERO