Clarien Bank To Increase Base Lending Rates
Effective January 16, 2017, Clarien Bank Limited will be increasing its BMD$ personal base lending rate by 25 basis points [0.25%] from 3.75% to 4.00% and its BMD$ commercial base lending rate by 25 basis points [0.25%] from 4.00% to 4.25%.
“These increases are as a result of changes to the US Federal Reserve Rates in 2016,” a spokesperson said.
“Increases in rates are as outlined in the client lending agreement. The Bank will be issuing notices in the coming weeks to all lending clients regarding their repayment details.
“We continue to work with all of our clients on a regular basis to understand their current financial position, and encourage clients to contact their lending officer to discuss the changes to their repayment terms.”
The US Federal Reserve raised rates from 0.5% to 0.75%, yet Bermuda banks have set base lending rates 3.25%-3.5% above that level.
Also odd that these rates are exactly the same as the Butterfield rates. Interesting that two banks that are supposed to be competing in an open market have exactly the same base lending rates.
Presumably Clarien will also increase interest rates to their clients who have savings account with the bank? Nice business paying me 1/4 % interest ( if I’m lucky) and then turn around and lend my money to a third party at 4% interest.
Whoops – sorry didn’t mean to dislike…. I meant to say that’s the base rate and the true rate is that plus a spread. Banks usually lend at base rate + 2% to 2.5%. So really they’re earning at least 6% interest. Would be nice to see more interest
.
This is a good reminder that because Bermuda uses the US dollar, it is totally at the mercy of US interest rates. So all that Bermuda Government debt could get a lot more painful to pay off. The Government needs to make big spending cuts and stop getting further into debt!