HSBC Bank, Lombard Bank and APS Bank still have to decide whether they will lower interest rates following cuts announced by the European Central Bank on Thursday. The European Central Bank cut rates to just 1.5 per cent, bringing the borrowing costs in the eurozone to a historic low with this fifth reduction in just six months. Soon after the decision was announced, Bank of Valletta announced it would not be lowering its interest rates to those recommended by the ECB.

The bank said it was satisfied that the rates it charged were already very competitive by European standards, pointing out that reducing the rates further would hurt depositors.

Contacted yesterday, HSBC Bank Malta and APS Bank said they still had to take a decision on the matter.

Lombard Bank seemed reluctant to speak to the press, saying only that "as a listed licensed and regulated credit institution, Lombard Bank communicates information of a commercial nature in strict conformity with the guidelines set by its regulators and supervisors".

ECB Governor Jean-Claude Trichet did not exclude the possibility of further cuts in the coming months, reflecting a struggling European economy adversely affected by the global recession.

Financial analysts believe the ECB will cut interest rates by another 50 basis points by the middle of the year, bringing the refinancing rate down to one per cent.