Standard Chartered Bank (Hong Kong) followed its rivals to raise its mortgage rate 25 basis points to 4.75 per cent yesterday in a move to ease pressure on its margins after a recent cut in prime lending rate. The lender cut the discount to its 7.75 per cent prime rate from three to 2.75 percentage points. It also reduced cash rebates to as much as 0.8 per cent from 1 per cent. Banks' margins from lendings were squeezed after a 25 basis point reduction in the prime rate two weeks ago as the interbank rate, a benchmark for funding costs, remains high amid a liquidity crunch caused by a string of initial public offerings. The three-month Hong Kong interbank offered rate has been hovering at more than 5 per cent, brushing off downward pressure from a 50 basis point interest rate cut in the United States. Other Hong Kong lenders, including Bank of East Asia, DBS Hong Kong, China Construction Bank (Asia) and Dah Sing Bank, last week also raised mortgage rates or cut the cash rebates. 'If the Hibor stays at the current level, the industry's mortgage rate may have room for further increase,' said Susanna Liew, Standard Chartered Hong Kong general manager for mortgages and car loans. The Hibor rose 25 to 30 basis points over the past month. However, that would not have a major impact on Standard Chartered's mortgage lending since it was a long-term business, she said. Standard Chartered's share of the home loan market rose to 12.4 per cent last month from 11.2 per cent in August, the second biggest after Bank of China's 13.8 per cent, which was down by 1.9 percentage points from a month ago, according to mReferral Mortgage Brokerage Services. They were followed by Hang Seng Bank's 9.6 per cent and HSBC's 9.5 per cent, mReferral said. Bank of China, the city's biggest mortgage lender by market value, has been keeping its 4.6 per cent mortgage rate and 0.8 per cent cash rebates unchanged. HSBC and its subsidiary Hang Seng Bank said they would closely monitor the market situation.