Standard Chartered has announced the provision of a three-month holiday for personal loans, including business mortgages, to help its Nigerian customers to better manage the financial impact of the coronavirus pandemic, it said Wednesday.
The bank also said under the new reliefs, customers can request for payment holiday for up to three months for credit card payments.
In a statement titled “Standing with You” which was sent to customers on Wednesday, Lamin Manjang, Standard Chartered Nigeria CEO, said the bank was acting in line “with the expectation of the CBN that banks should consider providing reliefs to their clients and based on our commitment to be socially responsible and client-focused at all times”.
As part of its policy measures in response to the novel coronavirus outbreak and its fallout, the Central Bank of Nigeria (CBN) had on March 16 granted all Deposit Money Banks (DMBs) in the country leave to consider temporary and time-limited restructuring of the tenor and loan terms for businesses and households most affected by the pandemic, particularly oil and gas, agriculture and manufacturing.
“We have put in place measures aimed at easing the financial pressure on our clients, through the provision of temporary reliefs,” Manjang said.
“If you currently pay the total amount that is due on your credit card on a monthly basis, you can request to change this to a monthly payment of the minimum amount that is due on the card which is 1 percent of the outstanding subject to a minimum of a N5,000,” the statement said.
The bank is also providing relief for other retail business loans and a payment holiday of up to three months can be granted.
For corporate clients of Standard Chartered, relationship managers will be calling them to assess their business needs and discuss how the bank can better support such clients at a time like this.
Manhang, who stressed the investment the bank has made over the years, said “as these rapidly evolving measures may change from time to time, updates will be provided as more directions are received from the federal government”.
Loan restructuring means rather than classifying those loans as bad, the initial terms and conditions have been adjusted to ensure that asset quality does not decline significantly, said Gbolahan Ologunro, analyst at CSL Stockbrokers.
“However, the impact of restructuring will still be felt on lender’s interest income,” Ologunro said.
Bongo Adi, economist at Lagos Business School, had advised FG-led negotiations with lenders at a national level to extend the moratorium on loans as one way to help the economy recover quickly from an imminent recession projected by the IMF.
While a loan restructuring would serve the purpose of giving customers time to recover from shock to earnings, it would also provide a soft landing for lenders who in 2016 saw bad loans rise sharply after customers failed to repay loan due to effects of an oil price crash.
The CBN last month said it would work closely with DMBs to ensure that the sue of the forbearance was targeted, transparent and temporary, whilst maintaining individual DMB’s financial strength and overall financial stability of the system.