Six major Hong Kong banks keep prime rates unchanged despite HKMA base rate cut

Core Viewpoint - Major lenders in Hong Kong, including HSBC, Standard Chartered, and Bank of China (Hong Kong), have maintained their prime lending and savings rates despite a recent cut in the base rate by the Hong Kong Monetary Authority (HKMA) [1][2][3]. Group 1: Prime Lending Rates - HSBC and its subsidiary Hang Seng Bank, along with Bank of China (Hong Kong), have kept their prime lending rate at 5 per cent [3]. - Standard Chartered, Bank of East Asia (BEA), and Shanghai Commercial Bank have maintained their lending rate at 5.25 per cent [3]. - Analysts indicate that banks are reluctant to lower lending rates further due to already low savings rates, which could impact profitability [2][7]. Group 2: Savings Rates - HSBC, Hang Seng, BEA, and Bank of China (Hong Kong) have set their Hong Kong dollar savings rate at 0.001 per cent per annum, offering no interest for deposits below HK$5,000 (approximately US$641) [5]. - Standard Chartered has maintained a 0.001 per cent savings rate on deposits of HK$1 or more, while Shanghai Commercial Bank has the same rate for deposits of HK$10,000 or more [5]. - HSBC has also reduced its US dollar savings rate by 12.4 basis points to 0.001 per cent, aligning it with the Hong Kong dollar rate [6]. Group 3: Market Context - The HKMA has cut its base interest rate for the third time in three months, reducing it by a quarter of a percentage point to 4 per cent [8]. - This rate cut follows a similar reduction by the US Federal Reserve, which lowered its target rate to a range of 3.5 per cent to 3.75 per cent [8].