HSBC, 5 other Hong Kong lenders cut rates to lowest level in 2 years

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Cuts could lighten monthly mortgage burden by HK$709 for a typical HK$5 million, 30-year loan, a broker says

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Office workers crossing a busy street near a HSBC branch in Mong Kok on October 22 Photo: Nora Tam

Enoch Yiu

Published: 12:53pm, 8 Nov 2024Updated: 4:45pm, 8 Nov 2024

Six major Hong Kong lenders, including the city’s three note-issuing banks – HSBC, Standard Chartered, and Bank of China Hong Kong (BOCHK) – lowered their prime lending rates for a second time this year, trimming the cost of borrowing to the lowest level in two years.

BOCHK, HSBC and its subsidiary Hang Seng Bank will trim their prime rate by 25 basis points to 5.375 per cent from Monday, according to separate statements. This is the lowest since November 2022.

Standard Chartered, Bank of East Asia, and ICBC (Asia), the local unit of China’s biggest lender, will also cut their prime rate by 25 basis points to 5.625 per cent from Monday.

Except Standard Chartered, the other five lenders will cut the savings rate by the same margin to 0.375 per cent per annum on deposits above HK$5,000 (US$640) and will maintain zero interest on deposits below that sum. Standard Chartered will cut its savings rate to the same level, but for deposits above HK$1.

The cuts came after the Hong Kong Monetary Authority lowered its base rate to 5 per cent from 5.25 per cent on Friday, the lowest since February 2023. The Federal Reserve decided to ease its monetary policy again, with a second cut to its Fed funds target rate this year to a range of 4.5 per cent to 4.75 per cent, after concluding its rate-setting meeting on Thursday.

“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.”