Absa’s customers offered financial support | 16 April 2020
As the biggest retail bank in Seychelles, Absa Bank Seychelles has announced independent relief initiatives in support of affected customers.
This is in response to the economic impact of COVID-19 on its customers whereby they will be eligible to start repaying back their loans after a given grace period.
These include an expanded payment holiday offering of up to six months to all business customers, irrespective of turnover, in the hospitality and tourism related sectors, inclusive of transportation and entertainment industries, who have been affected by the virus and retail customers who will get a three-month expanded payment holidayoffering. This is in addition to previously announced national measures.
The announcement was made in a press conference yesterday by Johan Van Schalkwyk, Absa Seychelles’ managing director, in the presence of the bank’s chairman, Jean Weeling-Lee and the chief risk officer, Sarah Lang.
Businesses, especially those in the hospitality and tourism related sectors, are being offered, through the expanded payment holiday offering, the option of not repaying interests on their loans and capital for a period of six months to support their business and employees. As for the existing retail customers, they too will be offered the same expanded payment holiday offering but only for a period of three months in view of difficulty they may face in the wake of the pandemic.
Mr Van Schalkwyk said that with the COVID-19 pandemic impacting severely economically in all sectors, especially in the tourism sector, “it is fair to say that companies’ cash flow is going to be under severe pressure. And when cash flow is under pressure it is logic to deduct that our businesses and our personal customers will find it difficult to honour their commitments”.
He noted that the payment holiday offering initiative is not a bail-out to business banking customers but about ensuring the bank releases cash flow into their respective businesses and also into the hands of personal customers.
“With the most personal customers in our retail banking environment, we therefore thought that it would be appropriate for us as a bank to extend a helping hand and some relief to our customers during this very, very difficult time,” Mr Van Schalkwyk said, adding that the relief is being funded by capital from Absa shareholders, independent of any intended national measures that may yet again be further announced. He stressed that the payment holiday offering is not a grant and it has to be repaid.
“This is a relief to accommodate our customers that has been loyal to us for many, many years,” Mr Van Schalkwyk said, urging those who will be able to pay back their loan to continue to pay rather than taking the payment holiday offering.
“The economic impact of the COVID-19 pandemic is one we have been monitoring very closely and it is fair to say that we are faced with an unprecedented global and national challenge. While we can only speculate as to what the future holds, we are all in this together and we are committed to doing our part to support our customers through this crisis. The future of banks is inevitably linked to the future of our customers; one cannot survive, let alone thrive, without the other. We are in this together,” Mr Van Schalkwyk said.
He further said that the bank will ensure that customers can continue to safely access services through its digital channels and ATM network, which includes a number of Cash Accepting ATMs. In light of the COVID-19 measures, he urged customers to use those facilities in a bid to avoid unnecessary congestion and time wasted at the branches.
Elaborating further on the expanded payment holiday offering, Ms Lang explained that at the end of the six months’ relief period during which the businesses have been allowed to benefit from non-payment of loans including interests, the bank will assess and restructure the loans including interests on a case by case basis, for payment to be made over agreed extended years.
For the personal customers with house, car and personal loans and who will find it difficult to make payments during this time of the pandemic, she said that the bank will also make assessments of their situations after the end of the three months, followed with further engagements and discussions with them as to how the loan repayment will be done, which will practically be more or less on the same basis as the business banking customers.
These payment solutions apply to both the principal amounts borrowed and interest applicable for the periods granted. These interest charges will be accrued and customers will be advised of changes to loan tenors, conditions and repayment terms to take effect once the payment holiday period has ended.
Ms Lang said that the bank have already identified and contacted some of the businesses in relation to the optional expanded payment holiday offering while it will start to contact its personal customers during the course of this week.
She noted that the business banking customer will be further assessed on applying the payment holiday offering initiative while the retail customer will be automatically assisted.
In view of the preventive measures in relation to COVID-19, with regards to social distancing, Ms Lang said that businesses are being contacted via their personal relationship managers by phone or e-mail while the standard retail customers will be contacted via SMS and text messages, to advise them on how to apply for the payment solutions.
She noted that this will be followed by a confirmation letter, following the consentment by the individual on taking the payment holiday offering. The bank is also urging all customers to ensure that their contact information is up to date.
In conclusion, chairman Weeling-Lee said that while nobody is able to project what will happen beyond the month of June 2020, it is fitting for the bank at this point in time to primordially protect its customers as they are going into some difficult times.
He noted that the bank will responsibly and prudently reassess its position in the wake of changes in the country’s economic prospect.