CBA sits in the middle on rates
(7 December 2009 – Australia) The Commonwealth Bank has announced an interest rate hike of 0.37 percent, 12 basis points outside of the Reserve Bank of Australia’s third consecutive interest rate hike.
CBA is sure to endure harsh criticism for the move; after National Australia Bank slammed Westpac in a media release.
NAB announced that they would only be increasing rates within the RBA’s moves and invited Westpac’s customers to join the bank.
Lisa Gray, group executive, NAB Personal Banking, said that NAB is determined to be competitive, to offer customers a better deal and attract new customers to NAB. The bank is sending a message to customers at Westpac, and the other banks, that NAB can offer them a better deal.
CBA will increase their variable interest rate by 37 basis points to 6.61 percent, which will come into effect for new and existing customer from the 9th December.
The Bank has also increased its interest rates on a range of deposit accounts by up to 0.50 percent.
The bank said in a media release that as Australia’s largest home lender, the Commonwealth Bank has continued to be a leader in providing home finance to Australians at the lowest interest rate of the major banks during the Global Financial crisis and remains committed to being competitive in the market.
Ross McEwan, group executive, Retail Banking Services, CBA said that while the change in the official cash rate has partly contributed to this interest rate increase, the sustained increase in wholesale funding costs that the bank is experiencing has also been a major factor.
Wholesale funding costs continue to remain at record highs and, as cheaper funding expires and is replaced with more expensive funding, the overall cost of funds has increased, Mr McEwan added.
Mr McEwan also said that in the market for deposits, there is also intense competition amongst the banks. As wholesale funding costs remain high CBA are also increasing its deposit interest rates. This is good news for many of the banks customers who have been experiencing near historic low returns on their investments as banks have navigated through the global crisis.
NAB announced that they would only be increasing rates within the RBA’s moves and invited Westpac’s customers to join the bank.
Lisa Gray, group executive, NAB Personal Banking, said that NAB is determined to be competitive, to offer customers a better deal and attract new customers to NAB. The bank is sending a message to customers at Westpac, and the other banks, that NAB can offer them a better deal.
CBA will increase their variable interest rate by 37 basis points to 6.61 percent, which will come into effect for new and existing customer from the 9th December.
The Bank has also increased its interest rates on a range of deposit accounts by up to 0.50 percent.
The bank said in a media release that as Australia’s largest home lender, the Commonwealth Bank has continued to be a leader in providing home finance to Australians at the lowest interest rate of the major banks during the Global Financial crisis and remains committed to being competitive in the market.
Ross McEwan, group executive, Retail Banking Services, CBA said that while the change in the official cash rate has partly contributed to this interest rate increase, the sustained increase in wholesale funding costs that the bank is experiencing has also been a major factor.
Wholesale funding costs continue to remain at record highs and, as cheaper funding expires and is replaced with more expensive funding, the overall cost of funds has increased, Mr McEwan added.
Mr McEwan also said that in the market for deposits, there is also intense competition amongst the banks. As wholesale funding costs remain high CBA are also increasing its deposit interest rates. This is good news for many of the banks customers who have been experiencing near historic low returns on their investments as banks have navigated through the global crisis.
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