The United States launched a new round of interest rate hikes in March this year. When the interest rate gap between Hong Kong and the United States widened and the cost of capital continued to rise, the leading bank HSBC finally announced that it is adding the best interest rate (P﹚) for the first time in nearly 4 years!
HSBC announced today (22nd) that starting from tomorrow (23rd), the Hong Kong dollar prime rate will be raised by 12.5 basis points, from 5.0% to 5.125% per annum.
HSBC last adjusted the Hong Kong dollar prime rate on November 1, 2019, when the rate was cut by 12.5 basis points.
At the same time, HSBC also raised the interest rate on Hong Kong dollar savings accounts by 12.4 pips.
HSBC last adjusted the Hong Kong dollar savings account interest rate on November 1, 2019, when the interest rate was cut by 12.4 basis points.
For the last time, add P only once with an amplitude of 0.125%
Looking through the information, the last time the Bank of Hong Kong raised the prime rate (P) was on September 28, 2018, and HSBC took the lead in announcing on the 27th that after raising the P rate by 0.125% to 5.125%, it was unsustainable.
By the end of October 2019, when the Federal Reserve cut interest rates, major banks such as HSBC lowered P to the current level.
At present, the mainstream "fine P" and "big P" on the market are 5% and 5.25% respectively. In addition to HSBC, Hang Seng and BOC Hong Kong are the major banks using the former, and Standard Chartered is the latter.
On the eve of the interest rate hike in 2018, the 1-month interest rate had long been above 1.2%, and the bank balance had dropped to about 50 billion yuan. According to the cap level, the interest rate is slightly higher than that of P, which pushes the market share of P to surpass that of H for a time.
From that year to the week before HSBC added P, the one-month interbank rate rose to about 1.85%. On the day of adding P, the interbank rate was as high as 2.3%, which was 2.7% lower than that of HSBC P (5%).
Traditionally, the gap between Hong Kong bank P and one-month interest rate has narrowed to less than 3%, and banks will have greater incentives to increase P.
At the beginning of September this year, the 1-month interest rate rose more than 2%, and it rose to 2.59% yesterday (21st), the highest since December 31, 2019. However, the bank balance still has about 120 billion yuan, which is higher than the previous round of adding P .
A number of large, medium and small Hong Kong banks have raised the H-percent cap and P-per-interest rate. HSBC, Hang Seng and Bank of China have even set the H-per-cap rate slightly higher than the P-percent interest rate, which is similar to the situation before the addition of P in 2018.
