Westpac not ‘Jetstar of banking’
(9 December 2009 – Australia) After remaining tight lipped about last week’s shock rate increase, Mrs Kelly and her senior executives have defended their actions saying they are not the ‘Jetstar of banking’.
Westpac’s chief has refused to engage in a slanging match with Treasurer Wayne Swan over the bank’s decision to raise rates, 20 basis points, above the Reserve Bank of Australia’s official movement.
However, Mrs Kelly has finally broken her silence by saying that she believes that politicians ‘absolutely’ understand the new environment of rising average bank funding costs.
The politicians can see the evidence before them that funding costs have gone up materially, Mrs Kelly added.
Mrs Kelly reiterated her firm view that there was a ‘new normal’ in banking in the wake of the financial crisis. Everyone, Mrs Kelly said, would pay a higher cost for debt, including companies, individuals and the banks themselves.
Mr Hanlon, Westpac’s new group executive, people and transformation said that 70 percent of the bank’s customers bought on service and only 30 percent on price.
Mr Hanlon played down the bank’s controversial move, saying that the bank does not have a price leading strategy and is not the ‘Jetstar of banking’.
Westpac reportedly has managed to grow their lending book by A$30 billion this year, a result of charging on average 17 basis points more than its rivals.
Asked if Westpac would keep its significant price differential, Mr Hanlon said it was unclear where home-loan prices would ultimately settle.
But the bank suspects that it will become evident over the next 12 months, Mr Hanlon added.
However, Mrs Kelly has finally broken her silence by saying that she believes that politicians ‘absolutely’ understand the new environment of rising average bank funding costs.
The politicians can see the evidence before them that funding costs have gone up materially, Mrs Kelly added.
Mrs Kelly reiterated her firm view that there was a ‘new normal’ in banking in the wake of the financial crisis. Everyone, Mrs Kelly said, would pay a higher cost for debt, including companies, individuals and the banks themselves.
Mr Hanlon, Westpac’s new group executive, people and transformation said that 70 percent of the bank’s customers bought on service and only 30 percent on price.
Mr Hanlon played down the bank’s controversial move, saying that the bank does not have a price leading strategy and is not the ‘Jetstar of banking’.
Westpac reportedly has managed to grow their lending book by A$30 billion this year, a result of charging on average 17 basis points more than its rivals.
Asked if Westpac would keep its significant price differential, Mr Hanlon said it was unclear where home-loan prices would ultimately settle.
But the bank suspects that it will become evident over the next 12 months, Mr Hanlon added.
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