Nov. 7 (Bloomberg) -- HSBC Holdings Plc, the bank with the biggest network in Hong Kong, cut its benchmark lending rate in the city by a quarter point to a four-year low of 5 percent after money market rates dropped.

The reduction, the first since March, will take effect Nov. 10, the bank said in a statement today. At 5 percent, the so- called best lending rate is the lowest since November 2004.

Hang Seng Bank Ltd., a unit of HSBC, also cut its benchmark rate by 25 basis points to 5 percent. Standard Chartered Plc, the third-largest U.K. bank, reduced its so-called best lending rate in Hong Kong to 5.25 percent from 5.5 percent, according to a company statement. The cuts will take effect Nov. 10.

BOC Hong Kong (Holdings) Ltd., the city's largest publicly traded bank by assets, will trim its best lending rate to 5 percent, from 5.25 percent from Nov. 8, it said in an e-mailed statement today. Bank of East Asia Ltd., the city's third- biggest bank by assets, will reduce its best lending rate to 5.25 percent from 5.5 percent, effective Nov. 10, it said in an e-mailed statement.

``The interbank rates have come down, so there's room for a rate cut,'' said HSBC spokeswoman Yvonne Chuang.

The benchmark three-month Hong Kong Interbank Offered Rate fell 20 basis points to 2.237 percent today, the lowest since Sept. 16. The Hong Kong Monetary Authority reduced the city's base rate twice last month and added liquidity by buying U.S. dollars to ease the credit squeeze deepened by the collapse of New York-based Lehman Brothers Holdings Inc. on Sept. 15.

Standard Chartered late yesterday raised mortgage rates in Hong Kong to as much as 4.25 percent.

To contact the reporter on this story: Chia-Peck Wong in Hong Kong at cpwong@bloomberg.net

Last Updated: November 7, 2008 06:06 EST