HSBC leads Hong Kong banks in cutting rates, reducing funding cost to historic low of 5%
Half-point reduction over the last six weeks will be positive for the property market and the economy in general, HKMA boss says
Led by HSBC, Hong Kong’s major banks cut their prime lending rates – to a historic low of 5 per cent in some cases – on Thursday, further reducing funding costs to help reboot the city’s businesses and reduce the burden on mortgage borrowers.
HSBC and its subsidiary Hang Seng Bank, alongside Bank of China (Hong Kong), trimmed their prime lending rate by 12.5 basis points to a historic low of 5 per cent, they said in separate statements on Thursday.
Standard Chartered and Bank of East Asia cut their prime lending rate by the same margin to 5.25 per cent. All five banks reduced their savings rate by 12.4 basis points to 0.001 per cent. Only customers with deposits above HK$5,000 (US$643) earn the rate, while those with less continue to earn no interest.
HSBC and Hang Seng Bank’s new rates will start on Friday, while BOCHK, Standard Chartered and Bank of East Asia will change theirs from Monday. Hong Kong’s prime rate last stood at 5 per cent in September 2022.
This marked the second rate cut in six weeks for the lenders, after a 12.5-basis-point reduction in September. The city’s other banks are expected to follow suit later on Thursday.