HSBC Bank said today it would leave its base rate unchanged for the time being in spite of the recent ECB interest rate cut.

"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.

"It is important for HSBC Bank Malta to continue to grow its deposit base in order to support ongoing lending. HSBC Bank Malta primarily funds its business by raising customer deposits and, like the HSBC Group, always ensures it has more deposits than loans. Deposit rates are already very low and to reduce them further would disadvantage the majority of the bank’s customers who are savers. A number of European banks are offering higher credit interest rates and it is, therefore, important for HSBC to remain competitive for its customers," the bank said.

HSBC Bank Malta’s base rate for lending is 2.50% and for home loans 2.25%. These rates are the lowest they have ever been in recent years, the bank said, and business and personal borrowing customers have benefited considerably from the interest rate cuts of the past few months.

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

Bank of Valletta announced a similar decision last week.