Hong Kong banks chose to keep their prime rates or lending rates steady, resisting pressure set by the hike in US Federal Reserve's key interest rates, a move which reflects intense competition among themselves to revive sluggish loan growth, analysts said.
The US Federal Reserve raised its federal funds target rate by a quarter of a percentage point to 1.5%, which the Hong Kong Monetary Authority matched by raising the base rate for its discount window rate to 3.00% from 2.75%.
HSBC Holdings PLC unit Hongkong & Shanghai Banking Corp kept its best lending rate unchanged at 5%.
Bank of East Asia Ltd also kept its prime rate unchanged, as did Standard Chartered, and another HSBC unit Hang Seng Bank.
"Banks are cautious to raise the prime rate since competition among banks is stiff as far as their lending operations are concerned," Ben Kwong, research head at KGI Asia, said.
