Three of Big Four to pass on interest rate cuts
(3 May 2016 – Australia) ANZ Bank is the only big four bank that will not pass on the full value of the Reserve Bank of Australia's 0.25 percentage point reduction in official interest rates.
The lender says the decision is due to higher funding costs.
ANZ's move came after National Australia Bank (NAB), Westpac, Commonwealth Bank (CBA) and Bank of Queensland (BOQ) said they would pass on the full RBA cut to customers.
ANZ's group executive for Australia, Fred Ohlsson, said it would reduce small business lending rates by the full 0.25 of a percentage point, as well as raising rates on four-month term deposits and cutting a two-year fixed mortgage rate.
"The background is that wholesale funding costs have again been rising in recent months," he said.
"While we've absorbed this for some time and taken steps to reduce costs in our own business, higher funding costs mean we are only in a position to pass on a portion of the reduction in the cash rate to our customers."
NAB was the first of the “Big Four” to confirm it would pass on the rate cuts. Westpac and CBA followed shortly after. BOQ also said it would pass on the cut, less than a month after it raised interest rates, citing higher funding costs.
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