UOB announces virus relief measures for clients in Malaysia as outbreak worsens

UNITED Overseas Bank (UOB) on Friday announced a slew of relief measures for its customers in Malaysia - both businesses and individuals - affected by Covid-19, as the virus outbreak situation in the country takes a turn for the worse.

It declined to give an estimated figure for the projected costs, but said that the measures for its customers will be assessed and approved on a case-by-case basis.

The move aims to provide more flexibility for corporate clients, in particular small and medium-sized enterprises (SMEs), and individual customers in their cash flow management and ease their financial burden, said the bank.

For corporate clients including Islamic banking customers, measures include a moratorium on their loan repayments for up to one year, and the flexibility to request extension of trade bills maturing between March 18 and March 31, 2020 for clients with good track records. Clients can also choose to repay their trade repayments at the original maturity date.

Other measures include going through UOB Malaysia for applications for the government-administered Special Relief Facility, as well as a review to grant additional facilities based on clients' financing needs for those who need access to additional financing.

Individual customers affected by the virus outbreak also get help. There is a moratorium of up to six months on their personal loans, mortgages and credit cards, and interest-only repayments or payment holiday of up to six months on credit card repayments. The bank will also accommodate requests from customers to reschedule and restructure their mortgages, personal loans and credit card repayments.

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Wong Kim Choong, chief executive officer, UOB Malaysia, said: "We are committed to supporting and helping our customers who are impacted by Covid-19 and we will respond swiftly in helping them alleviate their financial burden."

The bank said in a statement that it will continue to evaluate its list of relief measures for both its conventional and Islamic banking customers to ensure it provides them with the adequate level of support to help them through this period.

UOB also urged customers to consider using Internet or mobile banking for transactions instead of making physical visits to its branches. Customers are also advised to schedule an appointment with their relationship manager before visiting the branch, said the bank.

This comes as Malaysia has seen a recent spike in the number of confirmed Covid-19 cases, and is currently the worst-hit in South-east Asia to date. As at Thursday, it has recorded about 900 cases in total, with two-thirds linked to a mass religious gathering in Kuala Lumpur.

Last month, UOB announced virus relief measures in Singapore totalling S$3 billion for companies, especially SMEs. Measures include allowing affected businesses to rework their principal repayments and to service only their loan interest for up to one year; extending up to one year working capital financing of up to S$5 million; and offering financing liquidity against mortgage security.

For retail customers, those affected by the current circumstances will be assessed on a case-by-case basis, said UOB.

Malaysia makes up about 11 per cent of UOB's overall pre-tax profits in 2019. In a Citi report earlier this week, UOB has projected for credit costs to reach 90 to 100 basis points (bps) as its worst-case scenario, up from its original estimate of 25 to 30 bps in February on the back of the virus outbreak fallout.

Exposure to sectors made vulnerable due to Covid-19 showed that retail, hospitality and tourism make up 6 per cent of UOB's loans, while consumer discretionary makes up 3 per cent of loans.