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FNB Increases Prime Leading Rate to 11%

Following the announcement by the South African Reserve Bank this afternoon, First National Bank (FNB) will increase its prime lending rate by 0.5% from 10.5% to 11%. The new rate will take effect on Monday, 12 June 2006 on all prime rate linked products.

Interest rates for new and existing FNB home loans will also be increased by 0.5% on Monday, 12 June.

"The rate hike will ensure longer-term growth and stability," said FNB CEO Michael Jordaan. "The Reserve Bank has acted early to stabilise present conditions," he added.

"For investors seeking interest income from deposits, higher rates will result in increased income. Tax breaks for interest income have increased from R2 000 to R22 000. However, additional steps should be taken to spur savings in South Africa, which are at all-time lows," says Jordaan.

Article Source - FNB - First National Bank

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