All Topics / Finance / Anz Bank puts interest rates up and breaks away from the RBA

Viewing 17 posts - 1 through 17 (of 17 total)
  • Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Well they threaten it and now it has come true.

    ANZ today announced it will increase interest rates for variable rate mortgages and small business lending by 0.06%pa.

    This is the first time the bank has moved to increase its rates independently of the RBA’s cash rate since it announced its split with the central bank’s pricing in December last year.

    According to a statement from the bank, the decision follows ANZ’s monthly interest rate review which considered:

    • the intense pressure on retail and business margins in recent months being sustained following:
    • increased competition among banks for consumer and business deposits that has provided higher relative returns to ANZ’s 2.9 million deposit customers;
    • higher costs paid by ANZ for $8 billion in long-term wholesale funding raised since October 2011 as a result of the economic and financial crisis in Europe which has made money more expensive for all banks to borrow.
    •  the stable monetary policy setting announced this week by the Reserve Bank of Australia following successive reductions in the cash rate in late 2011.
    •  the competitive environment, the impact of higher rates on customers and on loan growth, and also the need to act in a considered way with growing pockets of weakness in the Australian economy.

    Effective 17 February 2012, ANZ’s new standard variable mortgage rate will be 7.36%pa (7.46%pa comparison rate). New small business rates are effective from 17 February.

    ANZ will also cut its three year fixed rate mortgage by 0.15% to 5.99%pa as part of its Breakfree banking package.

    ANZ CEO Australia Philip Chronican said: “this month we faced a serious dilemma in our review, balancing the rising cost of bank funding including deposit customers’ interests in receiving highly competitive rates, and the expectation of borrowers that we keep lending rates as low as possible.

    “In December and January we absorbed the additional funding costs in the hope that funding pressures would ease and that no change in lending rates would be necessary.

    "However, margins in retail and business banking have now been squeezed for a number of months and we’ve taken the difficult decision to pass on part of the higher costs to customers while we also get on with taking action to reshape the bank for tougher times.

    “Our new monthly interest rate review process recognises that the Reserve Bank’s cash rate alone is not an accurate reflection of bank funding costs, particularly since the global financial crisis which has left all banks with the task of raising funds in volatile global markets and through stronger competition for deposits.

    “This change comes with a duty to explain to our customers what drives our decisions and provide greater transparency about our funding costs.

    “We also want to assure customers that we are committed to providing competitive products and we hope there will be an opportunity to lower rates in the coming months as greater confidence returns to global funding markets.

    “There has been much debate on banks in recent days. While we recognise our decision may leave some people frustrated and even angry, we believe Australia needs safe, well-run commercial banks that aren’t a burden on taxpayers and that can continue to lend. The alternative of weak, constrained banks that we see in the United States and in Europe is a recipe for stagnation and recession in Australia," Mr Chronican said.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544

    Hi Richard,

    Love this bit – I don't seem to recall the banks saying 'no thanks' to the government guarantee 4/5 years ago.

    Qlds007 wrote:
    Australia needs safe, well-run commercial banks that aren’t a burden on taxpayers and that can continue to lend.
    Profile photo of PaulliePaullie
    Member
    @paullie
    Join Date: 2009
    Post Count: 217

    Westpak just followed suit increasing by 0.1%.

    haha.

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Hmmm……very interesting. Now let's see what the other two do.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544

    Seems the ANZ decision to break away from the RBA's first Tuesday of the month announcements has given the other banks more time to keep rates at existing levels for longer.

    Competition would be a good thing. Oh for other big players in the market.   

    And, as if we needed a study to tell us what we all knew about rate fluctuations read this.

    Profile photo of PaulliePaullie
    Member
    @paullie
    Join Date: 2009
    Post Count: 217

    <moderator: delete language> Billions in repeatedly increasing profits every year yet they do not follow the rba cash rate move.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Typical. 

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of moxi10moxi10
    Participant
    @moxi10
    Join Date: 2010
    Post Count: 193

    Arrogant thick-skinned bastards. That does it for me. They're losing my support.  I'll be walking.

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Before you jump ship – the original post from Richard about ANZ increasing rates was in Feb. This isn't something that's happened recently.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of PLCPLC
    Participant
    @plc
    Join Date: 2012
    Post Count: 400

    Ha ha, almost got caught out myself Jamie.

    When I first clicked on the link and read the first post I thought ANZ were out of their minds. Then I saw the date of the post.

    Cheers

    Tom

    PLC | Phoenix Loan Consulting
    Email Me | Phone Me

    Melbourne based Mortgage Broker | Making Finance Simple

    Profile photo of JT7JT7
    Member
    @jt7
    Join Date: 2010
    Post Count: 286

    Perhaps an ideal time to be considering locking in at an attractive mid term rate 2-3 years. 

    Jack 

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544

    ING passing on the full 0.25 basis points effective from 12th Oct.

    Source http://www.rebonline.com.au/breaking-news/5562-bank-passes-on-full-rate-cut

    Be interesting to see what the others do.

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,850

    Why should banks move at the same time, direction and magnitude as the Reserve Bank? State Govts borrow from the RB not the commercial banks, they have to pay for their funds (from shares, deposits and borrrowings).

    My heart bleeds for the banks who are always under the hammer (just waiting for my ANZ share to level out a bit). ;)

    Profile photo of moxi10moxi10
    Participant
    @moxi10
    Join Date: 2010
    Post Count: 193
    Jamie M wrote:
    Before you jump ship – the original post from Richard about ANZ increasing rates was in Feb. This isn't something that's happened recently.

    Cheers

    Jamie

    Ha Ha

    After I couldn't find confirmation anywhere that the banks had raised rates I wondered what was going on. As Tom said, I thought ANZ and Westpac were out of their minds in their own little profit focused bubble world, but a rate raise didn't seem totally out of character. After further consideration, even the executives of those two banks should surely realize that not passing on the majority of the rate drop would be very damaging to sentiment and the economy and would lose them a lot of customers (including me) as well as cause them to be the deserving focus of unprecedented abuse.

    Profile photo of jmsracheljmsrachel
    Participant
    @jmsrachel
    Join Date: 2012
    Post Count: 711

    Haha i too got caught out, freaked me out for a minute

    Profile photo of gnggng
    Member
    @gng
    Join Date: 2011
    Post Count: 35

    NAB and CBA following BoQ, 0.2

    Profile photo of moxi10moxi10
    Participant
    @moxi10
    Join Date: 2010
    Post Count: 193
    moxi10 wrote:
    Arrogant thick-skinned bastards. That does it for me. They're losing my support.  I'll be walking.

    Westsuc lower rates 0.18%. They make it very difficult for me to regret my earlier hasty comment.

Viewing 17 posts - 1 through 17 (of 17 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.