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Reserve Bank and bank lobby group issue joint statement saying New Zealand banks are ready to respond to the impacts of coronavirus, tell financially affected customers to contact their banks

Reserve Bank and bank lobby group issue joint statement saying New Zealand banks are ready to respond to the impacts of coronavirus, tell financially affected customers to contact their banks

The Reserve Bank (RBNZ) and bank lobby group the New Zealand Bankers' Association (NZBA) have issued a joint statement in response to mounting concerns about the health and economic impacts of the global coronavirus outbreak.

They say NZ banks are ready to respond to the impacts of coronavirus and financially impacted customers should contact their banks. The statement comes after Finance Minister Grant Robertson said on Sunday he would be meeting with major bank CEOs on Monday to discuss what they were doing to support their business and personal customers.

The RBNZ and NZBA say depending on a customer's situation, possible options for bank support include; reducing or suspending principal loan payments and temporarily moving to interest-only repayments, helping restructure business loans, consolidating loans to help make repayments more manageable, providing access to short-term funding, and referring individual customers to budgeting services.

Below is the RBNZ and NZBA statement.

Banking sector prepared for responding to COVID-19

New Zealand banks are ready to respond to the impacts of coronavirus, the Reserve Bank of New Zealand and New Zealand Bankers’ Association say.

The COVID-19 outbreak has the potential to impact the operations of New Zealand’s banking sector by affecting banks’ staff, their funding and their customers.

The Reserve Bank has asked all banks about their risk management approaches and preparedness for COVID-19. Reserve Bank Governor Adrian Orr said the responses show the banks are prepared.

“Much of the banks’ focus has been on staff health and safety, and their ability to sustain their operations should the outbreak expand significantly. However, the banks are also well attuned to any impacts on their customers’ businesses, employment, and incomes,” Mr Orr says.

New Zealand Bankers’ Association chief executive Roger Beaumont says customers financially affected by COVID-19, particularly small to medium sized businesses, are encouraged to contact their bank.

Depending on the customers’ individual circumstances potential options for support include:

  • Reducing or suspending principal payments on loans and temporarily moving to interest-only repayments
  • Helping with restructuring business loans
  • Consolidating loans to help make repayments more manageable
  • Providing access to short-term funding
  • Referring individual customers to budgeting services.

“Each bank will have their own credit policies and approach to providing assistance. It’s important for affected customers to talk to their bank as soon as possible. That gives banks the best chance of offering assistance. Helping customers through any financial stress depends on good two-way communication,” Mr Beaumont says.

The Reserve Bank team are in regular dialogue with bank executives and are watching for signs of funding market pressures or emerging signs of credit stress.

“While we have not seen any significant pressures at this stage, we remain in regular contact with stakeholders across the financial sector. At the Reserve Bank we are prepared in our business continuity role to ensure a well-functioning financial system, including enabling access to cash, ensuring sufficient liquidity in the banking system, and managing a stable payments and settlements system,” Mr Orr says.

“All businesses should be preparing for possible disruptions from COVID-19. Think about how best to operate if staff are temporarily unavailable, or if suppliers have restricted stock, cash-flows are interrupted, and sales decline in some sectors,” Mr Orr says.

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However, in some cases the “helpful” bank increases/resets the term of the loan and/or principal payments get pushed further out – easier on borrower’s cash flow but ultimately more interest income for the bank.

More fluffy puppies please.

Nothing genuine about bank niceties.

Reduced executive pay and increased visible donations for those individuals and businesses who are suffering the most. By nothing more than lip service and parasite type interest only loans (at this stage).

I'm all for supporting small & medium businesses with measures like this.
Nothing more though.

If you're already in hardship after, let's not forget, only 1 month of this thing then that says more about your business than coronavirus.

And if you're an individual though, or purely leveraged into assets, then no way.
Nothing for you.
Welcome to the recession, suck it up - go talk to budget services and work out what you need to sell.

There wasn't much support from the banks post gfc...old smiling John didn't do anything!

What are they meant to do? Forgive your debt?

Don't cry about Banks lending too much now.
If you took the debt that's all on you.

Thats the point you see, pulling the mat out at the first instance of difficulty is not cool, they better not do it this time round!

When you're a parasite (bank) , you have to be careful not to suck too much from the host (us).

Difference is hosts typically do not knowingly let parasites leech off them.
Did the parasite (Bank) forge your signature on the loan docs whilst you were asleep??

No one made you sign up for the debt - don't act like an naive fool when risks come to bear.

No one earning paltry interest on Term Deposits or losing money on share portfolios has anyone to cry to in times like these.
And rightly so.

Maybe, but due to the banking system and inflation, assets such as homes are now at a price point where you cant buy one without using a bank. We are forever slaves to debt thanks to this wonderful system they created. Just love how they can make interest off factional lending.

Bingo. Cmat obviously can't grasp this concept

Referring individual customers to budgeting services

Not their problem you see

No help to savers/depositors ? Bummer.

The biggest irony of it all, but I suspect that was always the plan.

"Risk management" running down the high risk loan books to export industries?

Just proves we're in a debt driven society. The only help offered by banks is to borrowers, and that help is taking on more debt. It's one thing for individuals to be living hand-to-mouth, but for businesses? I'm still bewildered by the collapse of Flybe. At the end of the day, I have no sympathy for companies whose CEO's and directors sit safe while the workers go unpaid or are laid off.

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