Hong Kong Banks Anticipate Rise In Tax Loans

by Mary Swire, Tax-News.com, Hong Kong

20 November 2001

Hong Kong banks are predicting a considerable increase of as much as 20 per cent in tax loan applications within the next few weeks as workers are either being made redundant or their usual Christmas/end of year bonus is being withdrawn amid the current economic slowdown.

Hong Kong Chinese Bank head of consumer finance Albert Yip Chin-yung says that some banks have reduced their loan rates. Most workers applying for the tax loans are civil servants, teachers and other professionals who borrowed on average KH$80,000 each.

Bank of America (Asia) first vice-president of marketing and planning Katty Leigh also forecast tax loan applications to be on the rise by about 20 per cent and investment borrowing to take a turn for the worse. She said: 'Customers used to borrow for investment purposes but given that investment sentiment is weak, we expect borrowing this year will be reduced by 10 to 15 per cent.'

The Shanghai Commercial Bank spokesman is also anticipating a rise in the loans: 'We have heard that a lot of employers are cutting double pay and bonuses which are a traditional source of funds for individuals to make their tax payments.'

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