Storm over Bank’s rate decisions
(15 April 2009 – Australia) The decision by banks in Australia not to pass on the 25 basis point rate cut to customers has caused a storm across the country.
The RBA decided on a 25 basis point rate cut at the start of April, as a further stimulant to the Australian economy.
Banks in Australia, however, have decided in the large part to not pass on the rate to customers, explaining that funding costs are high and bank stability needs to be ensured.
Federal Treasurer, Wayne Swan, was one to react to the banks’ decisions saying that the Government is doing its part with substantial stimulus and it expects the banks to play their part, as well.
The Australian Bankers' Association (ABA), however, hit back, saying that some politicians and commentators are encouraging bank bashing and that the media’s rate debate is missing balance.
Of the Big Four banks, ANZ, CBA and Westpac all dropped home loan rates by just 10 basis points, while NAB kept their rates steady based on higher funding costs.
NAB weren’t the only bank to keep rates steady, with Bendigo and Adelaide bank also doing so, sighting funding costs not reducing at the same rate as the official cash rate.
The likes of Members Equity Bank and St George also came in on consensus, dropping home loan rates by 10 basis points.
Business Loans faired better from those banks that gave a mention to these underpublicised rates. Westpac and St George, as well as Rabobank with its rural loans, cut business loans by the full 25 basis points.
Banks in Australia, however, have decided in the large part to not pass on the rate to customers, explaining that funding costs are high and bank stability needs to be ensured.
Federal Treasurer, Wayne Swan, was one to react to the banks’ decisions saying that the Government is doing its part with substantial stimulus and it expects the banks to play their part, as well.
The Australian Bankers' Association (ABA), however, hit back, saying that some politicians and commentators are encouraging bank bashing and that the media’s rate debate is missing balance.
Of the Big Four banks, ANZ, CBA and Westpac all dropped home loan rates by just 10 basis points, while NAB kept their rates steady based on higher funding costs.
NAB weren’t the only bank to keep rates steady, with Bendigo and Adelaide bank also doing so, sighting funding costs not reducing at the same rate as the official cash rate.
The likes of Members Equity Bank and St George also came in on consensus, dropping home loan rates by 10 basis points.
Business Loans faired better from those banks that gave a mention to these underpublicised rates. Westpac and St George, as well as Rabobank with its rural loans, cut business loans by the full 25 basis points.
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