Guan Eng: Banks’ 2019 Profits Can Cover Loan Moratorium Extension

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Banks are able to extend the moratorium on loans as the industry had earned an estimated RM32 billion in after-tax profits for 2019, said DAP secretary-general Lim Guan Eng.

“The RM32 billion in after-tax profits for 2019 should provide sufficient cover for banks to bear the RM6.4 billion cost of delivering on their corporate social responsibility of extending moratorium of bank loans by another six months to aid their customers during the Covid-19 economic crisis,” he said in a statement today.

He was responding to Finance Minister Tengku Zafrul Abdul Aziz who yesterday told the Dewan Rakyat that the banking industry had lost RM6.4 billion since the implementation of the six-month moratorium in April to mitigate the impact of the Covid-19 pandemic on borrowers.

Lim said the amount of losses was a small price to pay for the banking industry, compared to the benefits of the moratorium to 93% of borrowers or 7.7 million individuals, and over 95% of small-and-medium enterprises (SMES), or 245,000 such companies.

“Even if the banks are unwilling to cough up the RM6.4 billion, the Federal government can bear the cost of RM6.4 billion to aid the 7.7 million individual borrowers and 245,000 SMEs.

“Furthermore, the RM6.4 billion cost is small compared to the tens of billions of ringgit in additional loans over and above the 2020 Budget loan provisions to finance the Covid-19 economic stimulus package.”

Lim, who was Pakatan Harapan’s finance minister, urged Putrajaya to announce the extension of the moratorium of bank loans by another six months.

“Failure to do so would only give rise to suspicion that the RM 295 billion stimulus package is only heard but not felt, benefiting certain well-connected groups but not ordinary Malaysians and SMEs.

“DAP urges Prime Minister  Muhyiddin Yassin to immediately announce the extension of the moratorium of bank loans by another six months to assure Malaysians that they are taken care off.” – TMI