Big banks fail to pass full rate cut
(8 October 2012 – Australia) Banks continue to distance themselves from Reserve Bank of Australia (RBA) rate decisions, with three of the big four again failing to pass on the latest official rate cut in full.
Last week, Commonwealth Bank of Australia (CBA), Westpac and National Australia Bank (NAB) sparked fresh criticism over their decision to lower their standard variable mortgages by less than Tuesday’s 0.25 percentage point cut in official rates.
Ending a three-day standoff in which the government pressured the banks to pass on the official cut in full, CBA and NAB said they would reduce their mortgage rates by 0.20 percentage points, to 6.6 percent and 6.58 percent respectively. Westpac announced a cut of 0.18 percentage points, to 6.71 percent.
ANZ Bank will revise its mortgage rate on Friday, in keeping with its go-it-alone pricing strategy, which seeks to break the link in consumers' minds between official rate moves and the rates charged by the commercial banks. In the past two months ANZ has left rates unchanged without mention of higher costs.
When the RBA cut official interest rates to 3.25 percent last week, it said the banks were having ''no difficulty'' in accessing funds, after a recent lift in financial market confidence.
Ending a three-day standoff in which the government pressured the banks to pass on the official cut in full, CBA and NAB said they would reduce their mortgage rates by 0.20 percentage points, to 6.6 percent and 6.58 percent respectively. Westpac announced a cut of 0.18 percentage points, to 6.71 percent.
ANZ Bank will revise its mortgage rate on Friday, in keeping with its go-it-alone pricing strategy, which seeks to break the link in consumers' minds between official rate moves and the rates charged by the commercial banks. In the past two months ANZ has left rates unchanged without mention of higher costs.
When the RBA cut official interest rates to 3.25 percent last week, it said the banks were having ''no difficulty'' in accessing funds, after a recent lift in financial market confidence.
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