Procedure and methodology for the calculation and determination of the Base Interest Rates of Alpha Bank Cyprus Ltd (the "Bank")
The purpose of this informational document is to present the procedure and methodology used for calculating and determining the Bank's Base Interest Rates, namely the Housing Loan Base Rate (HLBR), the Bank Base Rate (ΒΒR) and the Consumer Loan Base Rate (CLBR) (hereinafter collectively referred to as the "Bank’s Base Interest Rates"), in accordance with the Liberalization of Interest Rates and Relevant Matters Law No. 160(I)/1999 as amended to-date.
Methodology for determining the Bank's Base Interest Rates linked to a Reference Rate
The Bank's Base Interest Rates are linked to the three-month EURIBOR (EURO INTERBANK OFFERED RATE) (EURIBOR 3M).
EURIBOR is considered as the benchmark rate of Eurozone’s Interbank Money Market and is administered by the European Money Markets Institute (EMMI), or any successor. EURIBOR represents the average interest rate at which a number of first-rank European banks borrow funds from each other without providing collateral security.
EURIBOR is published daily at 11 a.m. Central European time, two business days prior to the commencement of the relevant interest period. Current and past EURIBOR rates are available at the following address:
About Euribor® | The European Money Markets Institute (EMMI) (emmi-benchmarks.eu)
Calculation frequency of the Base Interest Rates and announcement on the Bank's website
The Bank's Base Interest Rates are revised on a quarterly basis on February 25
th, May 25
th, August 25
th and November 25
th of each year. If any of the above specified dates coincide with a bank holiday in the Republic of Cyprus or a TARGET system holiday, then the Base Interest Rate change will take effect on the next working day. The applicable interest rate is based on the EURIBOR 3M (3-month Euribor) with value date that of the reset day of the Bank’s Base Interest Rates.
At the end of each quarter, the Bank announces on its website its Base Interest Rates, applicable in the following quarter.
Determination of the Bank’s Base Interest Rates
The Bank's Base Interest Rates are determined as follows:
- Housing Loan Base Rate (HLBR) = Euribor 3M + 2.00%
- Bank Base Rates (ΒΒR) = Euribor 3M + 4.00%
- Consumer Loan Base Rate (CLBR) = Euribor 3M + 4.50%
Example of BBR calculation with value date November 27th, 2023
Bank Base Rate (ΒΒR) = Euribor 3M + 4.00%
Using the Euribor 3M published on 23/11/2023 (value date 27/11/2023) 3.9560%, the Bank Base Rate (BBR) equals 3.9560% + 4.00%, i.e. 7.956%.
It is clarified that effective from August 25
th 2016, in cases where the Euribor 3M rate applicable on the Bank’s Base Rate revision date is negative, it will be considered zero for the purposes of calculating the Bank’s Base Rates.
Conditions/Parameters that may contribute to a change in the Base Interest Rates calculation methodology
The Bank reserves the right to amend the existing Base Interest Rates’ calculation methodology as follows:
- to link the Base Interest Rates to a different reference rate due to possible changes in the regulatory framework, market conditions or in the event of possible unavailability of the reference rate and/or,
- to adjust the margin added to the reference rate to determine the respective Base Interest Rate.
In the event of any change in the Bank’s Base Interest Rate calculation methodology, customers will be informed accordingly.