Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Banks Cut IR 1% on Deposits, Savings Accounts


Wed 20 Feb 2019 | 07:29 AM
Taarek Refaat

By: Taarek Refaat

CAIRO, Feb. 19 (SEE)- Banks decided to cut interest rates on deposits including savings and deposit accounts between 1-1.25 percent after the central bank decided to cut interest rates by 1 percent.

The banks are Al-Baraka Bank, Bank of Alexandria, National Bank of Kuwait, the United Bank, and Egyptian Arab Land Bank.

The banks' decisions to cut interest rates came after the central bank's monetary policy committee's (MPC) settlement to cut interest rates by 1 percent at 15.75 percent for deposits and 16.75 percent for lending.

 While some banks decided to cut rates on both savings and deposit accounts, other banks only cut interest rates on savings.

Some banks are still considering cutting interest rates on fixed-income securities, yet it would result in drying up of liquidity.

Al-Baraka Bank of Egypt cut interest rates by 1 percent on all deposits in consonance with the Central Bank's decision.

Chairman of the United Bank Ashraf El-Kady said the bank had decided to cut interest rates by 1 percent on fixed-income securities only for new customers while keeping it unchanged for existing savings accounts.

"Fixed-rate securities represent only a small portion of the total yielding certificates, as the bank had anticipated an early rate cut and converted most of the fixed-rate certificates to variable-rate demand ones," El-Kady added.

Interest rates were cut by 1 percent at 12 percent compared to 13% earlier this month. "The yield is issued to investors every 3 months," he noted.

The Bank of Alexandria also decided last Monday to cut interest rates on the Alex Gold and Alex Goldstar variable-income certificates.

The Alex Gold interest rate fell to 13.75 percent compared to14.75 percent, while the yield is disbursed on a quarterly basis during 3 years period.

The interest rate on the Alex Goldstar also fell 1 percent to record13.5 percent with a yield distributed every month for three years period.

The bank allows the sale and the redemption of bonds payable, including the repurchase of bonds before the maturity date.

The National Bank of Kuwait (NBK) also decided to cut rates between 1-1.25% on savings accounts and deposits. It also considering cutting rates on fixed-income certificates.

The bank offers two types of accounts: the first is the regular savings account that generates 7.75 percent annually, and the yields are paid every 3 months. The second account is the golden savings account, in which rates vary depending on the value of each segment.

The Egyptian Arab Land Bank has decided in the same way to cut rates by 1 percent on senior customers' premium deposits while maintaining the rates of ordinary customers' savings account and fixed rate income securities unchanged.