Banks pledge rent relief to their small tenants

Finance

Published: 20 Dec. 2020, 15:49 Updated: 20 Dec. 2020, 16:42

Banks pledge rent relief to their small tenants

A street filled with stores in Jongno District, central Seoul, is empty at lunchtime on Sunday as daily coronavirus cases surpass 1,000 for five days in a row. [YONHAP]

Banks are pledging to waive or cut rents for small businesses in buildings they own as coronavirus cases top 1,000 daily.

Hana Financial Group said Sunday it will cut rents for small businesses in office buildings owned by its affiliates including Hana Bank.

For microbusiness operators, usually with fewer than 10 staff, the group will exempt rents for six months starting in January. For small- and medium-sized enterprises (SMEs), it will cut rents by up to 50 percent. The discount will differ by type of business.

“We’ve made the decision as microbusiness operators and SMEs have to pay rent every month despite their struggles with social distancing regulations,” the group said in statement.

In March when Covid-19 cases hit peaks in the Daegu and North Gyeongsang area, the group exempted office rents for microbusiness operators and SMEs in the region for three months. In other regions, the group discounted rents by 30 percent.

Shinhan Bank is offering similar discounts for small businesses that are tenants in the bank’s buildings.

The bank said Friday it will waive rents for three months for operators of businesses that were mandated to close under the government’s Level 2.5 social distancing measures, such as fitness centers.

For very small businesses, the bank said it will offer 30 percent discounts on rents with a cap of 1 million won ($910).

If the government extends the period of Level 2.5 social distancing, the bank said it will consider extending the discounts as well.

If Level 3 social distancing measures are called for, the bank is planning to exempt rents for more businesses that need to close down including internet cafes and beauty shops. For small business operators that don’t need to close down, rents will be cut by a maximum 50 percent.

Last March, Shinhan Bank discounted office rents for six months.

“We plan to pursue our social responsibility as a financial company as people participate in social distancing campaigns despite difficult circumstances,” a Shinhan Bank spokesperson said.

BNK Financial Group has been offering 50 percent rent cuts from March through this month for some 120 microbusinesses leasing offices from buildings owned by the group’s affiliated banks — Busan Bank, BNK Kyongnam Bank and BNK Savings Bank.

The group started with a six-month plan in March, but decided to extend the discount period to December.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]