HSBC announces change in base rate

HSBC Bank Malta is reducing its base rate for all lending rates except home loans to three percent from 3.55 percent. The home loans base rate, which is the base for the bank’s variable mortgage lending, is being reduced to 2.75 percent from 3.35 percent.

HSBC’s move follows the European Central Bank’s announcement that it decreased its reference rate.

The revised base rates are effective as from tomorrow.

HSBC said it has left a number of its core saving rates unchanged in spite of the reduction in the ECB intervention rate. This should encourage savings and was a significant benefit for thousands of savings customers at HSBC. It would help ensure that the funding base for banks in Malta remained strong in spite of the low interest rate environment.

The bank said that it was continuing to balance both the requirements of its saving and borrowing customers. Interest rates, it said, would continue to be closely monitored and would be adjusted in the light of market conditions including possible further ECB rate reductions, the cost of wholesale funds and HSBC’s assessment of credit risk in line with Malta’s economic performance.

HSBC Bank Malta said it retained its higher rate on the HSBC On Line Savings Account at three percent per annum rate for balances over €5,000. This was in line with the bank’s drive to encourage use of electronic banking and automated channels. Term Deposit rates for two, three, four and five years were reduced by less than the reduction in ECB interest rates to 2.5 percent.

When questioned, a spokesman for HSBC said the interest rate on a one-year deposit is also 2.5 percent.