Westpac and CommBank announce rate decisions

Westpac and CommBank announce rate decisions
Date of Publication: Friday, 04 May 2012 14:04

Westpac and Commonwealth Bank have both released their plans following the Reserve Bank’s 0.5% reduction in interest rates earlier this week.


Westpac has announced that it will pass on the full interest rate cut – 50 basis points – for variable rate business loans, and that it will pass on three quarters of the cut to its mortgage customers. Standard variable rate home loans will fall by 37 basis points, to 7.09%, with effect from 14 May.


Westpac’s chief executive, Gail Kelly, suggested that the bank’s earnings report released on Thursday, which revealed a fall in first-half profits to nearly $3 billion after tax, justified the bank’s decisions.


Meanwhile, Commonwealth Bank has decided to pass on 80% of the cut, reducing its variable mortgage rate by 40 basis points, to 7.01%.


This sees CommBank now hot on the heels of NAB, who, after passing on two-thirds of the Reserve Bank’s cut, has standard variable home loan rates to 6.99%.


NAB defended their decision to pass on a smaller proportion of the interest rate cut by stating a dedication to retain the lowest SVR home loans of the ‘Big Four’ banks.


ANZ remains the sole member of the Big Four to have delayed its decisions, adamant that it would remain on schedule to discuss rates on the second Friday of each month.


The bank posted improved half-year profit of $2.92 billion, despite slower domestic performance. But chief executive Mike Smith has already said that four times the number of ANZ’s deposit customers would be negatively affected than the mortgage customers who would benefit if the bank oversold itself on reducing lending rates.


Kate Guthrie

Friday, 04 May 2012 14:04
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