HSBC keeps rates unchanged

HSBC Bank said it will be leaving its base rate unchanged for the time being in spite of the recent further interest rate cut by the European Central Bank.

"The decision not to change rates reflects the prevailing market environment and takes into account the needs of both borrowing and savings customers," the bank said yesterday.

The bank said it was important to continue to grow its deposit base to support ongoing lending. It primarily funded its business by raising customer deposits and, like the HSBC Group, always ensured it had more deposits than loans.

Deposit rates were already very low and to reduce them further would disadvantage the majority of the bank's customers who were savers. A number of European banks were offering higher credit interest rates and it was, therefore, important for HSBC to remain competitive for its customers, it added.

HSBC Bank Malta's base rate for lending is 2.5 per cent and 2.25 per cent for home loans. These rates were the lowest they have ever been in recent years, it pointed out, and business and personal borrowing customers benefited considerably from the interest rate cuts of the past months.

"As a result, the cost of borrowing has been significantly reduced and is competitive when compared to other European countries," it said.