HSBC, the biggest commercial bank in Hong Kong, lowered its prime lending rate for a second time this year, trimming borrowing costs for consumers and businesses. Bank of China’s local unit matched the move, and other lenders are expected to follow suit.
The UK banking group will trim its prime rate by 25 basis points to 5.375 per cent from Monday, according to a statement. It will also cut the savings rate by the same margin to 0.375 per cent on deposits above HK$5,000 (US$640). The bank maintained zero interest on deposits below that sum.
Bank of China (Hong Kong), part of the nation’s third-largest lender, also lowered its prime rate to 5.375 per cent to stay competitive and meet a possible increase in demand for loans from homebuyers.
“In light of another US rate cut and factors including economic and market conditions, HSBC decided to lower its Hong Kong dollar deposit and lending rates,” Hong Kong CEO Luanne Lim said in the statement. “We will continue to monitor the external environment and local economic outlook, ready to adjust our rates as needed.”
The move will lighten the monthly burden on borrowers by about HK$709 to HK$22,803, according to local mortgage broker mReferral, based on a typical HK$5 million, 30-year loan at prime rate minus 1.75 per cent.
