Oct 2009 Financial News

Scotiabank again reduces lending rates

Oct 18, 2009

Scotiabank Jamaica announced on Friday that it will cut its base lending rate by 62 basis points to 19.88 per cent, the second rate reduction announced by the bank in the past three months.

The new 19.88 per cent rate, which becomes effective November 1, 2009, will be the lowest loan rate among all the commercial banks locally.

Jacqueline Sharp, Scotiabank Group's chief financial officer said, "This second reduction in our lending rate is another demonstration of our keen commitment to stimulating recovery in all sectors. We are giving Jamaicans access to affordable financing, so that they can succeed in a very challenging economic environment." She also added that this reduction "was evidence of Scotiabank's confidence in Jamaica and the Bank's commitment to playing a lead role in encouraging industry and providing support to retail customers."

On August 3, Scotiabank reduced interest rates from 21.5 per cent to 20.5 per cent. And just last week, the firm announced a low rate concessionary loan for the productive sector. Small and medium businesses will have a facility to access $500 million from a Productive Sector Growth Fund at an interest rate of 9.95 per cent. Through the launch of the Fund, Scotiabank said it is aiming to stimulate production through the creation of new businesses and the expansion of existing businesses. The Productive Sector Growth Fund is divided into two parts, providing $75 million for businesses under two years old and $425 million for businesses wanting to expand and improve production.

Scotiabank said in a press release Friday that it will continue to review its rates to determine if opportunities exist for further adjustments over the short-term.
RBTT Bank Jamaica also announced last week that it will cut its prime lending rate on November 1. It will reduce rates by 50 basis point to 20.5 per cent at the beginning of November, after having reduced it by 100 basis points in September.

FirstCaribbean International Bank Jamaica dropped its prime rate from 21.75 per cent to 20.25 on October 1.

These announcements come against the background of the Bank of Jamaica dropping rates on its open market instruments four times between June and September, shaving 4.5 percentage points off rates. The rate on 180-day instruments now stand at 17 per cent while the rate on 30-day instruments are 12.5 per cent.


Source:
Jamaica Observer
Sunday October 18, 2009

http://www.jamaicaobserver.com/magazines/Business/html/20091017T190000-0500_161983_OBS_SCOTIABANK_AGAIN_REDUCES_LENDING_RATES.asp