Buffalo-based M&T Bank today joined Southwest Bank of St. Louis in trimming their prime lending rates by a quarter percentage point to 9.75 percent, effective Monday.
Southwest has carved out a reputation for cutting key interest rates ahead of major banks and M&T on other occasions also has been ahead of the pack.
The last cut in the prime rate came on Jan. 8, when major banks dropped it by 0.5 percent to 10 percent.
Analysts said they expect other major banks to follow the move toward lower rates.
"It's virtually certain the banking industry will go to 9.75 percent and follow their reduction," said William Sullivan, director of money market research at Dean Witter Reynolds Inc. He predicted the rate decline will spread through the industry by early next week.
The prime rate reflects a bank's cost of borrowing money and is used in calculating business and consumer loans such as mortgages.