Banks To Help Customers Move From Reliance To Resilience

The recently announced bank loan relief packages will provide financial relief to those Malaysians impacted by MCO3.0. But support needs to build resilience not reliance.

By Stuart Milne, CEO of HSBC Malaysia

At its heart, banking’s purpose is to enable sustainable prosperity. How we support must adapt to the situation at hand. In 2020, as Covid-19 gripped the world, HSBC Malaysia – along with our Malaysian banking peers – announced blanket six-month loan moratoriums for individuals and SMEs. 

HSBC applied similar measures across most of the markets in which we operate. Globally, we’ve provided more than $26 billion of relief to our personal customers more than $52 billion to our wholesale customers across more than 600 government schemes and moratoria. 

Of course, this has been made possible as a result of regulators, like the BNM, stewarding the banking sector to financial strength by requiring them to buffer stronger capital and liquidity measures. 

These measures, and the broader banking robustness, has helped ensure the Malaysian economy remains in a solid position. 

Indeed, economic green shoots are emerging underpinned by strong manufacturing export growth, increased inbound investment and rising domestic consumption. 

But Malaysia’s recent resurgence in Covid-19 cases – and the subsequent MCO 3.0 – means the economy is under pressure. And policy levers need to be, once again, pulled to ensure that economic growth gets back on track as quickly as possible. 

But the context is different to a year ago. We now know a lot more about Covid-19 and its spread: we have stronger tracing and tracking measures and we have a rapidly accelerating vaccination rollout programme. 

Against that backdrop, it makes sense that the banking industry’s approach to customer support – whilst unwavering – needs to be different, fit-for-purpose and multi-pronged.

In practical terms, the banking sector, therefore, continues to support with the relief measures, but with a specific emphasis on those most vulnerable to the current conditions.

As an industry, that means making it easy for individuals and SME customers which are experiencing financial difficulties to apply for and receive financial assistance. 

It also means banks being flexible with customers outside of the individual and SME universe, tailoring solutions to fit the particular customer’s situation. 

Beyond the very specific relief measures, our approach will be to help customers build financial resilience rather than financial reliance. This will help customers recover more quickly and build a sustainable future for our economy.

We are doing this in a number of ways:

  • First, we are helping our customers Rebuild their personal and business finances by remaining close to them, understanding their needs, and using our balance sheets to support them during their time of need. And, as people get back on their feet, we will champion financial education and inclusion, with many programmes planned and underway to build people’s financial literacy at all ages and life stages
  • Second, we are Reconnecting our customers to opportunities and pre-Covid relationships, particularly abroad. As an open and trade-focused economy, Malaysia is at its best when it is open. With its international network, HSBC is focused on helping our customers have the confidence and advice needed to better navigate their cross-border commercial endeavors.  
  • Third, we are helping our customers Reimagine their lives and business models including moving to digital and transitioning to lower carbon – both of which are global transitions that are particularly relevant and fast moving within the Southeast Asia region.

Malaysia is not alone in taking this more nuanced and targeted approach to relief measures and broader financial backstopping. 

As an international bank, we are seeing – first hand – how governments around the world are focusing loan moratoriums and other schemes on those that need them, rather than taking a blanket approach. 

I feel this is the right course. 

HSBC is here for our Malaysian customers. We have been for almost 140 years and we remain committed for the long term. We do this not only because it is in the best interests of our customers and ourselves, but also because it’s the right thing to do. 

In the current climate, that will be achieved by continuing to provide very specific relief measures to those of us who are most vulnerable, whilst supporting our wider customers to build resilience to meet the challenges ahead.

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