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ANZ finally cuts interest rates

ANZ finally cuts interest rates
Date of Publication: Monday, 14 May 2012 11:16

ANZ became the last of the big four to cut interest rates on Friday, choosing to pass on 75% of the Reserve Bank’s 0.5 percentage point cut.

 

The bank’s variable home loan rate was cut by 37 basis points to 7.05%, which keeps it in close proximity to its competitors. National Australia Bank (NAB) continues to lead the way, at 6.99%.

 

ANZ’s move would have placed it equal with NAB, had it not decided to raise rates independently of the Reserve Bank by 6 basis points (0.06 percentage points) last month.

 

ANZ’s chief executive, Philip Chronican, stressed the bank’s determination to remain competitive.

 

"We continue to work hard to ensure we are competitive despite sustained funding pressure driven by the high rates we are paying to our 2.9 million deposit customers relative to the Reserve Bank's cash rate and the ongoing volatility in wholesale money markets," he said.

 

ANZ remains highly profitable, despite a net interest margin decline. While margins for the Australian arm saw first-half profits fall away by 7%, the impressive strategy in Asia ensures that the bank continues to go from strength to strength.

 

Share prices are showing signs of recovery, with a 15% rise already this year. This is more positive news for CEO Mike Smith, whose performance continues to be assessed by returns to shareholders.

 

Kate Guthrie

Monday, 14 May 2012 11:16
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