UOB sets aside S$3b as relief assistance to SMEs

UNITED Overseas Bank (UOB) on Wednesday said it has set aside S$3 billion to provide companies in Singapore, especially small- and medium-sized enterprises (SMEs), with relief assistance to tide over the negative impact of the Covid-19 outbreak on their business.

The bank's relief measures would enable those affected companies to have more flexibility in their cash flow management. This comes as SMEs are due to have near-term liquidity needs, UOB said.

UOB clarified that the sum of S$3 billion will not be taken as impairments, as these companies have good track records and who have been servicing their repayments promptly.

Such measures would mean allowing affected businesses to rework their principal repayments and to service only their loan interest for up to one year; extending up to one year working capital financing of up to S$5 million; and offering financing liquidity against mortgage security.

For the latter, UOB is offering flexibility for businesses' secured loans, which could come in the form of an increased loan amount or an overdraft facility.

In a media statement, Wee Ee Cheong, deputy chairman and CEO, said: “In these particularly trying times, the government, businesses and communities are doing their very best to overcome this immediate challenge.

"For most companies, especially the SMEs, cash flow and financing are key to them sustaining their business. As their long-term banking partner, we believe our added support can help alleviate the business disruption and pressure from the ripple effect of the epidemic.”

UOB said it will assess retail customers who are affected by the current circumstances on a case-by-case basis. 

The bank declined to comment on when the cost of relief measures will hit its books, with the bank now in the black-out period as it will release its FY19 results on Feb 21.