Clarien Bank To Increase Base Lending Rates

March 22, 2016

Effective June 21, 2016 Clarien Bank Limited will be increasing its BMD$ personal base lending rate by 25 basis points [0.25%] from 3.50% to 3.75% and its BMD$ commercial base lending rate by 50 basis points [0.50%] from 3.50% to 4.00%.

“These increases are as a result of changes to the US Federal Reserve Rates in late 2015 and ongoing changes to operating costs to Clarien,” the company said.

“Given the protracted period of low interest rates and so as to provide our clients with as much advance notice as possible, this increase will be effective June 21, 2016.

“In the vast majority of cases and in order to minimize the cash flow impact on our clients, the monthly loan payments will remain as previously agreed with the Bank.

“In more complex cases where clients are either currently on interest only payments or in a past due status, we will work with them individually to revise the monthly payment terms and duration of their loan with the Bank.

“We appreciate that this may cause some concern for our clients, particularly in a difficult economic environment, and therefore encourage our clients to contact their lender to discuss the changes to the terms of their loan in more detail.

“Clarien remains committed to the Bermuda community and its clients. We continue to work with all of our clients on a regular basis to understand their current financial position however the Bank must take action as a result in changes to its operating and competitive environment.

“Additionally, the Bank confirms that it continually reviews its deposit rates to ensure that it offers creative and competitive savings products for clients.”

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Comments (21)

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  1. Jolly says:

    That’s messed up – Bermuda mortgage rates are so far above US rates.

    • Double S says:

      Probably because we don’t have a Fed/Central Bank to lend monies at cheap rates to our banks.

      You think BDA’s are high, I suggest you look at other jurisdictions like Central America and the like.

      • planeasday says:

        The FED raised rates with the false notion that the US economy is strong – it is not and they have in essence pricked the very bubble they began to inflate in 2009 – hear from the horses mouth a brief description of the farce that has been the last 7 years of market activity…

        The former Dallas Fed Chair himself said thus

        “What The Fed did, and I was part of it, was front-loaded an enormous rally starting in 2009 … in order to create a wealth effect…

        I wouldn’t blame [the declining stock market] on China.

        An uncomfortable digestive period is likely now.”

        Meaning the gig is up…zero interest rates fueling the feeding frenzy of institutional investors leveraging their bets to the tilt is over – the unwinding will begin. Couple that with a stated goal to devalue the “dollar” by 33% in 20 years meaning they EXPECT a basket of goods purchased in 2032 to cost $150 when that same basket of goods today is $100 – but FEAR NOT! The FED IS ALWAYS WRONG and wee will see Dollar devaluation at a far greater level and far sooner…so happy we are pegged to the petro-dollar aren’t you?

        Remember that mass exodus of “3500″ blamed on the PLP during the 2007 mini collapse? Wait till this time around and it has begun already and will be worse by magnitudes – the signs are there if you are looking.

        What Clarien have done is to set about the next wave of defaults in Bermuda – get ready for a further consolidation of wealth – meaning porer folk losing homes and richer folk buying them up fior fractions of value

        • Malcolm Raynor says:

          The U.S. Fed has gotten it all wrong for sure. They have been printing money since 2008 and the U.S. economy has sputtered along, giving the impression of a recovery. Thanks goodness we can’t legally print our currency, we would have done the same thing instead of balancing our budget and managing our debt.

          • frank says:

            most people don’t know but the federal reserve is illegal
            and has been so since 1913.

        • Dark Star says:

          If I was rich I wouldn’t be buying a house in Bermuda with todays political climate. To many loud vocal idiots stopping progress due to ghost’s of the past

      • Dark Star says:

        Turks and Caicos starts at over 7% base points and you typically have to have a serious amount in the bank as a security. Don’t even try to get a credit card from their banks

    • Sickofantz says:

      Partly this is because house prices in the US are more stable as the economy is more stable and their is growing demand. In Bermuda the demand for property is lessening due to our falling population. Henceforth homes here are a MUCH bigger risk for the banks.

  2. Jeremy Deacon says:

    I asked Bob in a Bernews podcast (http://bernews.com/2016/03/podcast-finance-minister-bob-richards-budget/) whether putting up the payroll tax was a bit of a gamble – he said, categorically, that gambling did not come into the equation.
    But now this happens – and when (not if) other banks follow suit, there must be question marks over whether the non-gamble was worth it. Thoughts?

    • Dunno says:

      I’m pretty sure that Clarien’s base rate increase is related to the U.S interest rate increase…. not the Bermuda payroll tax increase. I can’t see where the article says that. If it was a result of the payroll tax increase, I don’t see why they’d even mention the U.S increase at all.

    • Zevon says:

      The interest rates at banks are absolutely nothing to do with payroll tax.

  3. Unbelievable says:

    I am so disappointed with Clarien Bank. They have jacked up their rates and fees right across the board. I don’t even understand why…it’ snot like there is anything special happening at the bank. No special considerations, no promotions, nothing that is in he interest of the client.

    I don’t blame people for closing their accounts.

    • Zevon says:

      But if you invested there, you would expect them to pay you a competitive rate on a CD, right?

      • aceboy says:

        I would for sure. The rates currently offered on CDs is zero. They raised their rates for mortgage customers but do not appear to have raised deposit rates. In that situation only Clarien wins.

        Thus the little add-on at the end of the article:

        “Additionally, the Bank confirms that it continually reviews its deposit rates to ensure that it offers creative and competitive savings products for clients.”

        ….but no mention of a deposit rate increase.

        • serengeti says:

          CD rates are low, but they are not zero. They change day by day, and they depend (at all banks) on fed rates, the length of the CD, and the amount invested.

          But if Clarion is not competitive on what it pays on cd’s, people will go elsewhere. Presumably so would borrowers, if the rates are uncompetitive.

  4. Keepin' it Real!...4Real! says:

    People just don’t understand or are afraid of what is taking place here and globally.

  5. Toodle-oo says:

    The Bermuda economy is not recovering . It’s ‘re-evolving’ in a way that we all must get used to less . And that should include charging less because most are earning less . You can’t continue to try and get blood out of a stone.

    I’ll believe that things are really on the up and up when the banks start giving better returns on money invested in all its different forms .

    Until then , the economy sucks no matter all the fantastical claims about ‘turn arounds’ and ‘green shoots’ .

  6. Keepin' it Real!...4Real! says:

    What ever happened to 7% at Swans Savings…

  7. cap232 says:

    Give me control of the money supply ,I couldn’t care less who governs your country.
    David Rockefeller

    • frank says:

      this was said by a member of the Rothschild family

  8. Patricia Gordon-Pamplin says:

    It is one thing to raise interest rates on loans, but how about raising rates on savings accounts, from which some funds are used to finance loans!!