Friday, 10th October 2008 - 15:10CET
HSBC cuts rates
HSBC Bank Malta said this afternoon that as a result of the ECB interest rate change, it is reducing its Home Loan Base Rate (HMLR) from 4.25% to 3.75%. The HMLR is the base for the bank’s variable mortgage lending.
Reflecting the current market conditions, HSBC has adjusted its base rate for all other lending to 3.95%.
The revised base rates are effective as from Monday 13th October 2008.
HSBC has also reduced savings rates in line with the ECB rate cut, with the exception of the HSBC On Line Savings Account which has been retained at 3% p.a.. This is in line with bank policy to encourage use of electronic banking and its automated channels.
The European Central Bank (ECB) two days ago announced a decrease in its Reference Rate from 4.25% to 3.75%.
RSS
Comments
In a loan of €10,000 the difference would be €20, but as someone mentioned earlier, you don't have to look at the base rate but at the APR, which is different and it is that rate that reflects the actual price of lending since this would also include the initial charges and any other fees which the banks may not publicly advertise.
As regards HSBC UK, you may also know(since you read some article or saw TV somewhere) that HSBC is so stong in liquidity in UK that IT DOES NOT NEED GOVERNMENT HELP. That indication alone is enough proof that HSBC is in solid ground and at no risk.
As regards BOV being partly owned by the government, just look at the financial situation of our government and you will notice what safety the government offers...
As regards HSBC investments...no they don't invest locally otherwise they would never make the sorts of profits they make. But having HSBC present in so many countries for me is guarantee enough that they know in advance certain market conditions. Why was HSBC not so affected by the US crisis? Because it knew and was well prepared beforehand.
you're saying that the difference in only 0.20c in a €100. But I don't think that anyone has a loan of only a €100 and in thousands that 0.20c WOULD DO a difference.
And as opposed to BOV, who immediately advised the public on the current situtation, why didn't HSBC say anything?? Does it only invest locally?? I doubt it..
If you're saying that HSBC is safer than BOV, I think you're not seeing the whole picture. BOV is still party owned by the government where as HSBC is fully privatised. HSBC's treasury is in the UK and what is the UK going through at the moment? About 1000 HSBC employees in London lose their jobs.
Why not...would be a great opportunity... I need to finish my Economics studies first, then I'll see... Thanks for the congrats...maybe if I fail as an economist I may get into PR!! :)
Granted - On-Line Savings Account could be a good account for a particular segment. But I am sure you will agree that the account that nearly everybody has is the normal savings account and not the on-line version of it.
And btw - the charges are as follows (just so that readers get the full picture):
Where more than 60 cheques are presented per annum, a charge of €2.33 per additional cheque presented is charged.Cash withdrawal transactions affected at the branch tellers on the Online Banking Account will incur a €2.33 charge per transaction.
I think that's it on this subject from me. In any case, that's great HSBC PR pitch you've put in here. Congrats! They might employ you:)
Yea you have a good argument there but my point is that lowering interest rates makes the loan option too easy and just encourages the tempation to take uneccesary risk, not only for individuals but businesses too; if they see their competitors expanding through taking out a huge overdraft then they are nearly forced to follow suit in order to compete.
I did pay for my house with my own money because i dont see the point in debt at all; i think of all the money i would be throwing away through interest and i think of what kind of legacy to leave for my children.
Its a question of opportunity cost Elaine.
The only charges that apply are if you issue more than 60 cheques a year and if you go to a cashier to withdraw money instead of using the ATM card....which SAVINGS account gives you a cheque book? Usually those are current accounts with 0% or very low interest (lower than savings accounts). And who doesn't use an ATM these days? Only those who have time to waste and wait in a queue.... and who doesn't have internet banking to manage their money online.. you sure have internet since you're reading and writing here.....(and btw, HSBC Internet banking is free as opposed to other banks)
I'm no expert - but the argument you make linking the savings rate to how cautious a bank is or isn't does not make sense. We're talking of the basic savings rate here. And perhaps the reason for paying a lower savings rate could reflect a profit orientation rather than a customer orientation. So maybe BOV is taking a longer term view and being more considerate towards its customers than HSBC.
Re Lehman - I made quick search. BOV issued a statement when the financial crisis broke out: http://www.borzamalta.com.mt/compannounce/BOV159.pdf
I have'nt seen any HSBC Malta official comment since the start of crisis. They were just happy to quote from HSBC London. But what about HSBC Malta? It's a separate company, no?
BOV CEO has also given an interview on the subject: http://www.businesstoday.com.mt/2008/10/01/interview.html
Makes interesting reading...
Ah! That's the catch! "On-line savings account". Which is different to the normal savings account that most customers have and for which they pay 1.35% p.a.. Suggest you quote the charges associated to the "On-line savings account" to give the full picture.
In any case - you make a great fan of HSBC. Good luck!
The cautiosness in Malta's banks is firstly guaranteed by the MFSA and Central Bank of Malta. This should be enough as a guarantee. But to further put your mind at rest, you can quote HSBC's press release issued yesterday (if I'm not mistake) whereby the bank has said that it does not need any help from the UK government because it has enough liquidity. That has been the bank's policy for the last 100 years and I don't think that it will change.
As regards the interest rates, some banks are more cautious than others, meaning they risk less of their customers' and shareholders' money. It is a fact well known the the highest potential returns are those made on risky investments. Maybe the difference between HSBC and BoV's rates reflects this cautiousness.... as far as I know it is BoV that had links with Lehman Bros and other institutions in trouble (so finally it will be their shareholders who will pay for this with lower return on their shares)
It's in the press release... just re-read it....anzi, here it is:
"HSBC has also reduced savings rates in line with the ECB rate cut, with the exception of the HSBC On Line Savings Account which has been retained at 3% p.a.. This is in line with bank policy to encourage use of electronic banking and its automated channels."
And just in case, here is the website:
https://www.hsbc.com.mt/1/2/PERSONAL/savings-current/online-banking-account
Enjoy the reading....
You're saying that HSBC has retained a savings account paying 3% interest per annum. Where did you get that information from? Their website says that they pay 1.35% p.a. on a savings accoung.
Just referenced BOV's website too. BOV pays 1.75% p.a. on a savings account.
This is something which is happening throughout the whole world. Don't you follow any news being newspapers or TV?
Can't complain, the difference is only 0.2%. It isn't a charity organisation. Banks profits go to overheads, employees pay, tax from profits to inland revenue, etc.
I have made it clear that our banks have always been cautious if you read my comment well. But cautious now does not mean cautious in 10 or 20 years time. And that is what my comment was all about. I repeat: we have to remain cautiuos like we have always been!
Do you confirm that this move has nothing to do with the international scenario ?
On a different note, is there enough liquid cash to make good for the €3.8 billion national debt ? Food for thought....
If this is your attempt to lure anyone into voting MLP in the next election then you have failed miserably. If this misinformation is fed to you by the MLP leaders then we can look forward to some pretty dark times if ever they make it to the top spot.
It is just unbelievable how certain parts of society dont mind making a fool out of themselves as long as they do not miss the chance to shoot at the government, umbad fejn jolqtu jolqtu. I mean, where is the dignity in oneself?
When taking out a loan you are quoted rate + the Bank's base rate. You need to compare the APR not the base rates to see who is cheaper.
What I know is that lending is becoming expensive worldwide, and as stated in by various financial analysts today, the global 0.5% reduction in the refinancing rates had little effect.
Today I would prefer to play my cards safe and use this logic... what does cheap means in the present scenario, and what are the risks involved. How stable and protected is the bank's capital where I place my money in, or how safe is the bank that is lending me money for my house loan.
What I read is that HSBC has a Tier 1 capital that can make the Bank more secure for both liabilities and assets. Hope this means something for it's customers!!!
I would think twice before taking expensive risks since further rate cuts are expected to be announces by ECB in November.
The banks' (note plural) base rates are independent of the ECB base rate and usually, banks adjust in accordance to the ECB. When a base rate change occurs, BOTH lending rates AND savings rates are changed (this also applies to all banks)
Therefore banks can have different base rates for different products.
@Dr Aquilina SPagnol
0.2% is just 20cents per €100 which I think is a very small difference (small price for peace of mind). Apart from that, HSBC has retained a savings account at 3% (which everyone seems to ignore).
@J Portelli
Maltese banks have always kept a cautious profile. In fact, a bank in Malta cannot lend any money unless it has liquid cash to secure that lending. In other words, if a bank has liquid cash amounting to €1,000,000 it cannot lend more than that. This keeps maltese banks quite safe. Also note that HSBC not only is not in trouble in Malta but also in the UK where HSBC have announced that they do not need any of the money offered by the UK government to help banks, but instead injected cash from own resources.
If more than 50% of bank customers have a loan where the hell is the bank going to get the money from ? This is what is happening in other countries right now and what will happen in Malta unless we remain cautious like we have always been.
I'd just like to emphasise that this move has nothing to do with the international situation. It was only intended to address the domestic poor state of economy, lack of investment and a paralysed building industry that has been going on for the last 12 months.
X'ghandha x'taqsam l'ekonomija lokali mar-rata li tbaxxiet! Il banek taghna iridu jimxu mar-rati li taghtihom l-ECB u ghalhekk baxxewhom.
Turix l'injoranza tieghek b-dan il-mod!!
Jekk tqabbel l-ekonomija lokali ma' dak li qed jigri barra min pajjizna tinduna li m'ghandniex nofs il problemi li ghandhom huma bhalissa.
Id-dinja kollha qed tbghati bhal issa, u int tippretendi li ma teffettwaniex??
If buying your first property falls within that category. then your property is an investment. I think its more a utility just like your cooker and fridge. It does not depreciate as much as your white goods does(till now). But you would never sell your house to go for a holiday or something liek that coz u would need to buy another house.
You only increase your net worth
sur gvern tkmpliex tqarraq bil poplu ghax l ugigh ahna qed inhossuh
isn't that what got the world into the mess its in?