Westpac second to lift rates
(13 February 2012 – Australia) Westpac is the second of the big four Australian banks to raise interest rates despite the Reserve Bank of Australia (RBA)’s decision to keep them on hold.
After ANZ made the announcement on Friday to lift its standard variable home loan rate by 0.06 percent, Westpac also announced a raise – by 0.10 percent to 7.46 percent, effective from 20 February.
Westpac group executive, retail and business banking, Jason Yetton said the rate hike reflected the increased cost to the bank of raising money.
'While we believe that reducing rates in November and December last year was the right thing to do for our customers and the economy, higher deposit costs and higher wholesale funding costs since then make today's move necessary,' Yetton said in a statement published late on Friday.
He said that over the past four months intense competition for term deposits had increased their costs to Westpac by around 0.3 percentage points and that wholesale funding costs had also increased significantly.
Yetton said that by way of example unsecured five-year funding transactions raised overseas by banks to support lending in Australia were currently priced at around 2.3 percentage points over the benchmark bank bill rate.
Westpac calculated that the increase will translate into a A$16 a month rise in repayments on a A$250,000 mortgage.
Westpac group executive, retail and business banking, Jason Yetton said the rate hike reflected the increased cost to the bank of raising money.
'While we believe that reducing rates in November and December last year was the right thing to do for our customers and the economy, higher deposit costs and higher wholesale funding costs since then make today's move necessary,' Yetton said in a statement published late on Friday.
He said that over the past four months intense competition for term deposits had increased their costs to Westpac by around 0.3 percentage points and that wholesale funding costs had also increased significantly.
Yetton said that by way of example unsecured five-year funding transactions raised overseas by banks to support lending in Australia were currently priced at around 2.3 percentage points over the benchmark bank bill rate.
Westpac calculated that the increase will translate into a A$16 a month rise in repayments on a A$250,000 mortgage.
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