Banks cut prime lending rates

Johannesburg - Commercial banks First National Bank (FNB), Nedbank, Standard Bank as well as Absa have all announced they will cut their prime lending rates by 0.5% from 10.5% to 10%.

This follows the decision on Thursday by the monetary policy committee to decrease the repo rate by 50 basis points to 6.5%.

FNB said the new interest rate will be applicable to all new and existing prime linked loans, including home loans, from Friday 26 March 2010.

"Today's cut takes us to historically low rates last seen in 1981. We have already noted a material improvement in consumer confidence. This, together with 2010 Fifa World Cup(tm) which is only 77 days from kickoff, augers well for the rest of 2010," said Michael Jordaan, CEO of FNB.

As the legacy of recessionary conditions continues to threaten consumers, FNB offers assistance in the form of a Debt Remedy facility from FNB Home Loans and a Special Repayment Arrangement offered by FNB Card, he added.

Nedbank said the 50 basis point decrease applied to its prime overdraft rate, the vehicle and asset finance rate and the mortgage rate applicable to home loans.

The interest rate for both new and existing vehicle and asset finance loans as well as new and existing home loans will decrease with effect, March 26 2010. it said.

"The charitable donations made on behalf of clients to a Nedbank Affinity linked investment account will remain unchanged," it added.

- I-Net Bridge