CBA Cuts Rates, Westpac and ANZ May Follow
The Commonwealth Bank (CBA) has announced that it is lowering its borrowing rates to 40 basis points effective Friday, May 11. The CBA is the second bank to do this in a span of a week, following National Australia Bank (NAB) which announced a cut the other day, putting its borrowing rates at 32 basis points.
The lending rate adjustment is the result of a move by the Reserve Bank, which slashed down cash rates to support the economy. Analysts said that in doing this, the big four banks can retain their margin even with mortgage rates down. Such as with a 40 basis point cut in standard 25 year $300k variable, where the monthly repayments can go from $81 to $1998.
Deposit rates for CBA have yet to be adjusted. The bank said this is still ‘under review.’
Reports also indicated that Westpac and ANZ are making similar announcements in the next few days.
According to Westpac chief executive Gail Kelly, the organization is delaying mortgage rates discussion to a later day as the company is still focusing on its profit briefings. Westpac has just announced their first-half profits despite that rise of funding costs and pressures in the banking industry.
ANZ, meanwhile, has already raised its lending rate variables two times this year last February and April. The move has angered the public and has gone against the derivatives of the central bank. ANZ has also released a report of its first-half profit, which has been pegged under $3 billion.