11 Mar 2020
As coronavirus spreads the UK, three of Britain’s biggest banks, RBS, Lloyds and Barclays, have announced that they are offering repayment holidays on loans to customers affected by the coronavirus outbreak.
RBS said on Tuesday that affected borrowers would be able to defer their repayments on mortgages and other loans by up to three months, as part of its policy of supporting customers who suffer financial hardship from unexpected events. The bank will also waive early closure charges on fixed savings accounts and offer refunds on credit card cash advance fees so customers can access cash without penalty.
NatWest, part of RBS, has already announced measures to help small firms suffering cash flow or supply chain problems due to the current health crisis. RBS rivals Lloyds and Barclays also announced their support packages for business customers on Tuesday.
Britain’s largest domestic lender Lloyds said it was offering relief on fees and loan repayments to some small firms hit by the virus. Lloyds said it would offer 2 billion pounds ($2.6 billion) of finance with no fees to affected small firms that have a turnover of up to 25 million GBP. The funding is part of its expected 18 billion GBP of business lending this year.
Barclays said it was contacting business customers affected by coronavirus to offer them 12-month capital repayment holidays on existing loans of more than 25,000 GBP as part of a package of measures to support companies hit by the outbreak. However, none of the three banks defined exactly how customers would have to be affected by the virus to receive the help. At the time of reporting, there have been 321 cases and five deaths in Britain so far due to coronavirus.
Lloyds has also been disrupted with the closure of a call center in Northern Ireland that employs approx.1,000 people. This came after a member of staff tested positive for the virus. other businesses have also had to shut their offices and ask their employees to work from home. Cross-border supply chains have also shown disruptions. Analysts estimate that RBS and HSBC’s loan books are most exposed to a potential spike in bad loans resulting from the spread of coronavirus, with Lloyds and Barclays least effected.
RBS’s move to extend support to personal customers comes as Italy’s deputy economy minister announced that payments on mortgages could be suspended across the country. Lloyds said its managers had already spoken to more than 10,000 small and medium-sized enterprises about the coronavirus outbreak but said the damage on businesses so far had been minimal. It also said that any loan repayment holidays would be offered subject to individual agreements.