FNB, Bank Windhoek drop home loan rate

TWO weeks after Bank of Namibia (BoN) Governor Tom Alweendo called on commercial banks to come to the aid of struggling consumers by dropping lending rates further, FNB Namibia and Bank Windhoek heeded the call by cutting their home loan rates by 25 basis points to 11,75 per cent.

The other two banks – Nedbank Namibia and Standard Bank Namibia – have not reacted yet.Despite the decrease, the two banks still don’t offer the best deal in town when it comes to home loans. Nedbank Namibia currently offers mortgage loans at 11,5 per cent.FNB Namibia and Bank Windhoek are now on par with Standard Bank Namibia.However, not one of the four banks has dropped its prime lending rate, ranging from 11,25 per cent to 11,5 per cent.Governor Alweendo on August 19 said he expected commercial banks to narrow the ‘unjustified’ gap between the repo and prime rates even though the central bank left its bank rate unchanged at seven per cent.The BoN wants the interest rate spread, currently varying from 425 to 450 basis points, to shrink to 375 basis points by year-end.Alweendo said although he can’t force commercial banks to drop rates, he can’t allow the BoN’s monetary policy to become ineffective either.Should the banks render the policy ineffective because they refuse to pass rate relief on to consumers, the BoN might push for the legal right to force them, Alweendo said,’I really hope it doesn’t come to that,’ the Governor said at the time.jo-mare@namibian.com.na