(Bloomberg) -- China’s largest banks are allowing residents in Shanghai to delay their mortgage payments as part of the nation’s broader efforts to support the financial hub in its Covid fight. 

Lenders including Industrial & Commercial Bank of China Ltd. and Bank of Communications Co. are offering Shanghai clients a payment holiday on their mortgage loans for as long as three months. China Construction Bank Corp. allowed clients to delay their payment on both mortgage and consumer loans for up to 28 days while Bank of China Ltd. said any records of overdue payment due to the pandemic will be removed. 

Shanghai is the epicenter of China’s worst outbreak since the early days of the pandemic in Wuhan and authorities have doubled down on their Covid Zero pillars of mass testing and lockdowns to try to stamp out infections. It’s swiftly turned into a logistical nightmare as the city’s 25 million residents -- sealed off in their homes for more than a week already -- struggle to get basic groceries delivered and officials seek to censor growing public discontent.

Shanghai recorded more than 26,000 new Covid infections for Sunday, an all-time high, as China’s largest documented outbreak continued to spread despite extended lockdowns. Known as Covid Zero, the strategy has become less effective in preventing domestic flareups due to the growing contagiousness of new variants and more disruptive to economic activities and people’s lives. 

The move echoed similar efforts in early 2020 when China announced a months-long payment holiday for the nation’s small- and medium-sized firms, as well as preferential loan policies, including flexible arrangements for mortgage and credit card payments, to those impacted by the pandemic. 

Profit growth at China’s megabanks is being threatened by the debt crisis that’s rippling through the property market and a resurgence in Covid infections. Bocom president Liu Jun said last month the lender faces the most challenging year in his 30-year banking career in 2022, citing Covid, geopolitical risks and shrinking domestic demand.

Chinese banks had more than 52.2 trillion yuan ($8.2 trillion) of outstanding loans to the real estate sector as of December, including 38.3 trillion yuan of personal mortgages. The exposure was more than any other industry, and accounted for about 27% of the nation’s total lending, according to official data.

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