Overseas lenders support Shanghai amid headwinds

Foreign banks in Shanghai have been providing strong support for small businesses to ensure industrial and supply chain stability and help companies hedge against risks during the latest COVID-19 outbreak in the financial hub.

The China Banking and Insurance Regulatory Commission Shanghai Office announced on April 21 it had issued a notice urging banks to increase lending to meet funding needs for anti-pandemic efforts and resumption of work and production. The regulator also encouraged banks to reduce comprehensive financing costs of businesses by further cutting interest rates and fees.

Foreign banks responded eagerly to the regulator's call.

HSBC Bank (China) Co Ltd Shanghai Branch launched an inclusive finance program targeting micro and small enterprises (MSEs).The bank set up a 1 billion yuan ($148.61 million) credit fund, expedited approvals for small business loans, provided financing at favorable prices and promoted the supply of loans through smart supply chain finance and cooperation with guarantee companies.

Foreign banks operating in Shanghai also paid close attention to shocks brought by COVID-19 to upstream and downstream industrial and supply chains and responded to customer needs in a timely manner.

BNP Paribas (China) Ltd issued 865 banker's acceptances worth over 400 million yuan for a global auto parts supplier, which had difficulty providing contracts and original documents during the COVID-19 outbreak. The commercial lender managed to complete trade background checks through measures including information searches on the local tax administration's website.

The supplier is a core company in the automotive supply chain. By issuing banker's acceptances for the company, BNP Paribas ensured normal collections for more than 100 MSEs and smooth running of supply chains.

Commerzbank AG Shanghai Branch joined hands with a domestic wind turbine manufacturer and a supply chain platform to promote digital innovation of supply chain finance. Commerzbank became the first foreign bank to launch the supply chain bill discounting business in China at Shanghai Commercial Paper Exchange Corp Ltd during the pandemic and has so far provided financing worth some 3.26 million yuan for companies in upstream and downstream portions of the supply chain.

In addition, foreign banks also made all-out efforts to ensure stable supplies and safeguard people's livelihoods.

Standard Chartered Bank (China) Ltd Shanghai Branch gave a one-month deferment on the repayment of loan principal and interest for a supplier of imported fruits to relieve its financial stress, as the company suffered a slowdown in accounts receivable collections due to COVID-19.