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| Business |
| Stanbic increases cost of borrowing |
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by
Aubrey Mchulu, 01 November 2004
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15:35:05
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Stanbic Bank (Malawi) Limited said at the weekend it will increase the cost of borrowing from the bank by two percentage points effective tomorrow.
Stanbic Bank said in an announcement its new base lending rate is now 29 percent, up from 27 percent effected in June this year when the Reserve Bank of Malawi (RBM) lowered the bank rate.
The RBM cut the rate at which it lends money to commercial banks from 35 to 25 percent in June in what it said was a drive “to support efforts to restructure fiscal operations and more importantly, redirect investment towards real sector.”
But Stanbic has not given reasons for the revision of interest rates and efforts to talk to managing director Victor Mbewe yesterday proved futile as calls to his mobile phone went to voicemail while marketing manager Margaret Kubwalo’s cellular phone also went unanswered on several occasions.
Stanbic’s decision has, however, come barely weeks after its parent company, the Standard Bank of South Africa, projected Malawi’s bank rate to rise by 10 percentage points to 35 percent if annual inflation hits 20 percent by December as per government forecast.
The increase in the base lending rate has made Stanbic Bank the most expensive financial house in terms of the cost of borrowing compared to its competitors.
IndeBank Limited and Opportunity International Bank of Malawi have the lowest lending rate at 26 percent, one percentage point above the bank rate, while National Bank of Malawi, First Merchant Bank and NBS Bank lend out at 27 percent per annum.
Malawi Savings Bank, Loita Investment Bank, Finance Bank Malawi Limited and Nedbank are at 28 percent.
But for depositors, Stanbic has increased the interest rate on Current Account with a minimum of K250,000 from 1.5 percent to 2.5 percent per annum while interest on Savings Account has risen slightly from five to six percent and that on Saverplus Account from four to five percent.
For seven day call accounts, the new rate is seven percent, up from six percent while for the 30 days notice account the interest has also been increased from seven to eight percent.
Commenting on Stanbic’s decision to raise the base lending rate, an economist in the financial services industry said it was surprising because RBM has not revised the bank rate and indications are that the year would close at the prevailing rate of 25 percent. |
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