01.Big Banks indicate future rate rise pain
CHOICE believes the Big Four's decision to lift rates highlights the need for more transparency around bank funding.
After posting a first quarter cash profit of $1.5 billion, Westpac chief Gail Kelly has joined a chorus of the Big Banks claiming that other rises independant of the RBA will follow suit due to increased funding costs.
The other major banks recently joined the ANZ in moving outside the official RBA rate, including Westpac (10 basis points), St George (12 basis points), CBA (10 basis points) and NAB (9 basis points) sparking intense critiscm and public anger. ANZ lifted rates by six basis points, increasing its standard variable rate to 7.36%.
Westpac and ANZ have also been undertaking plans to cut jobs in the financial services sector, with some major media outlets indicating jobs would be heading overseas.
However, not all banks have decided to move independently of the RBA. Bank of Queensland (BoQ) has indicated it will move in step with any official rate changes, hoping to entice disgruntled consumers to switch to a BoQ loan product.
CHOICE encourages consumers of any bank that increases interest rates to consider switching to lenders that have lower rates and better offers, in line with CHOICE's Compare, Ditch and Switch campaign.
RBA keeps interest rates on hold
The move from ANZ comes after The Reserve Bank’s decision to keep official interest rates at the same level of 4.25%. While the decision was disappointing for people with mortgages, the move to increase rates quickly turns disappointment into justifiable anger.
CHOICE supports the right of banks to make a profit but the people’s watchdog also believes that Australian banks are in a strong enough position to maintain interest rates - certainly not increase them.
"Despite crying poor, increasing interest rates when the RBA has kept the official rate on hold is unjustifiable."
"There is now evidence that banks are less reliant on overseas funding. In fact, their approach is about making record profits the ‘new normal’, while putting their customers last," says Christopher Zinn, CHOICE director of campaigns and communications.
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