Two banks have agreed to government’s demand for three-month debt repayment holidays, after last-minute talks yesterday.
Announcing his Covid-19 economic stimulus package this week, Finance Minister Mark Brown said government would work with the banks to achieve the repayment holidays.
“People with mortgages are worried about how they will make their next loan repayment,” he said. “This will alleviate the stress and help us all keep calm.”
The repayment holidays were a measure sought by tourism leaders, in a major meeting earlier this week.
Yesterday, Bank of the South Pacific and Bank of the Cook Islands (which is government-owned) both agreed to Brown’s proposal.
David Street, BSP’s country manager, said “personal customers whose employment has been ceased temporarily or hours reduced” were eligible for assistance up to three months repayment holiday.
Street said they were contacting customers and encouraging them to come in and discuss their circumstances.
Deputy Prime Minister Mark Brown confirmed the state-owned BCI would also provide three months debt repayment holiday for “all borrowers”.
Brown, who was initially surprised at foreign owned banks delay in confirming government’s initiative, last night welcomed BSP’s support.
He is hoping ANZ also joins the party to help provide some relief to borrowers affected by this crisis.
“We are all in this together. I am confident that all the banks will support the government announcement. I daresay the dramatic measures we have imposed now will seem tame in the months to come,” Brown said.
ANZ’s new country manager Bernadette Shaw spoke at the tourism meeting this week, to offer an assurance of the bank’s commitment to help out. But yesterday she referred all inquiries to New Zealand.
Julia de Blaauw, ANZ’s Auckland-based manager for Pacific communications, said they were talking with the Cook Islands government about the options.
“We are in regular contact with the government and continue to discuss a number of ways that we can support our customers during this uncertain time,” she said.
ANZ yesterday announced their own support measures for Pacific customers, including dropping interest rates by 0.5 percentage points, and fee waivers across their business and retail customers.
The support measures are:
- A reduction of 0.5 per cent per annum on all local currency overdrafts for commercial customers (effective April 6);
- A reduction of 0.5 per cent per annum on all local currency variable term loans for commercial customers (effective May 1);
· A reduction of 0.5 per cent per annum on all local currency variable home loans and personal loans (effective May 1);
· Removal of monthly loan administration charges for term loans for both retail and commercial customers (effective May 1);
· A waiver on loan restructuring fees for commercial customers on a case-by-case basis;
· A reduction in repayment amounts for commercial customers in line with the reduced interest rates.
De Blaauw said: “In addition to the announced measures, we continue to work with customers who come to us with hardship requests individually to ensure our response suits their particular situation.
“We are in regular communication with the government and open to reviewing our support as the situation changes.”