The reduction will apply to all loans connected to the bank’s basic interest rate, both serviced and non-performing.

In a statement, the bank listed the rates to which the reduction will apply. Namely, its basic interest rate will fall from 5.25% to 4.25%; basic rate on business loans and business overdrafts to 3.25%; basic rate on housing loans to 2.65%; and basic rate on housing loans (connected to Hellenic’s older basic rate) to 3.50%.

Hellenic said that March 1 would also see a reduction of 1% on all credit card rates.

“Hellenic Bank believes that its decision contributes one more step towards restarting the economy of Cyprus,” the statement said.

“At the same time, it reaffirms its commitment to continue working with the Central Bank and the Finance ministry with a view to finding solutions to the complex problems caused by the financial crisis.”

The move came on the back of a similar announcement by the Bank of Cyprus on Monday, and the Co-operative Central Bank last week.

Last Monday, the Central Bank of Cyprus announced a reduction of its maximum deposit rate for commercial banks by 1%, in hopes that it would encourage them to lower their own lending rates.

“The CBC, having considered the governor’s prior consultations on this matter with representatives of the banks, is certain that credit institutions will proceed to commensurate reductions in lending rates promptly,” an announcement said.

Source: Cyprus Mail