THE island’s ‘big three’ banks – the Bank of Cyprus, the Hellenic Bank and the Alpha Bank have announced plans to cut their loan interest rates.
The Bank of Cyprus plans to cut their interest rates on housing loans for ‘financially vulnerable’ groups by as much as 1.0 per cent, student loans by 1.0 per cent, while the interest rate on loans on credit card would be lowered by about 2.0 per cent.
The Alpha Bank has announced up to a 1.7 per cent drop in interest on new consumer loans and on new loans for small and large businesses. New home loans would be reduced by up to 1.0 per cent.
The bank is also lowering its rate of interest on arrears on all loans, which overall would amount to decreasing the Annual Percentage Rate of Charge (APR) from 3.0 per cent to 1.8 per cent.
The new rates are applicable as of November 25, and are consequent to revisions the lender is making to its Bank Base Rate, the Housing Loan Base Rate and the Consumer Loan Base Rate as these are linked to the Euro Interbank Offered Rate (Euribor) on that date.
In cases where a court ruling has been issued against a debtor, Alpha Bank said it would not charge more than 9.5 per cent. The bank promised also to publish its base rates every three months.
The Hellenic Bank, which is now the island’s second largest lender after the demise of the Laiki, said it was revising its base rate downwards from 5.50 per cent to 5.25 per cent. Loan rates to businesses would be lowered from 4.50 per cent to 4.25 per cent.
In addition, the Hellenic will be cutting rates on two types of home loans, from 4.15 per cent to 3.65 per cent and from 5.00 per cent to 4.50 per cent, respectively.
The new rates apply as of November 13. The bank said it was considering “additional measures and reductions” which it would be announcing soon.
Last week, the Hellenic successfully completed its recapitalisation through private funds after three major investors poured in €100m, taking 75 per cent of the share capital.
Meanwhile, reports indicate that non-performing loans have reached around €15.5 billion.