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Bank Of Bermuda Lowers Base Rate

26 26 2003

Hamilton, Bermuda: 25 June 2003 - Bank of Bermuda today announced that it is lowering its Bermuda Dollar base rate, by 0.25% to 4.25%, effective 25 June 2003. The move by the Bank follows the US Federal Reserve Board's action today to lower short-term interest rates by 0.25%

Michael Collins, Head of Banking Services, commented: "The base rate represents the benchmark for pricing Bank of Bermuda demand loans, mortgage loans and overdrafts in Bermuda dollars. We have taken this action after balancing the Fed's latest move with factors in our own local market. Although we do not move in parallel with the Fed, we are impacted by their changes and over the long term respond in a similar fashion."

At the same time as the base rate change, Bank of Bermuda will reduce certain deposit rates. Bank of Bermuda clients will receive confirmation of these rate changes on their next account statement and the new USD and BMD Passbook Savings account rates will be displayed in branches.

"The base rate and market interest rates have continued to fall since 2000, which has resulted in interest rates on loans and savings accounts being at record lows," added Mr Collins. "Clients may benefit from extra cash each month if they have a loan or mortgage, but they are not seeing their savings grow as fast. The US economic outlook is still relatively uncertain and we do not anticipate the current environment changing significantly for the foreseeable future."