ANZ has become the last of the big four banks to pass on some of the Reserve Bank of Australia’s (RBA) interest rate cut.
ANZ trimmed its standard variable home loan and business lending rates on Friday by 37 basis points – just a month after it lifted interest rates.
The cut took the bank’s standard variable home loan rate to 7.05 per cent, in a move ANZ said would save customers with a $280,000 home loan about $20 a week.
Small businesses with an average loan of $130,000 stand to save $9.25 a week.
The move follows the RBA’s decision on May 1 to cut the cash rate by a surprise 50 basis points to 3.75 per cent.
None of the big four banks, which have long complained about higher funding costs due to the financial crisis in Europe, chose to pass on the RBA cut in full.
ANZ’s decision came four weeks after it lifted its home and business lending rates by six basis points.
The head of the bank’s Australian arm, Philip Chronican, said the RBA’s decision to reduce the cash rate had impacted domestic funding sources, giving ANZ scope to reduce its lending rates.
“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.
Morningstar head of equities research Peter Warnes said despite speculation that the RBA would continue to lower the cash rate in 2012, the big four banks would take a conservative approach to trimming their lending rates.
“Further cuts in official rates will not be passed on in full as banks try to minimise the increasing pressure on margins,” he said.
Assistant Treasurer David Bradbury said a lot of ANZ customers would feel betrayed by the bank’s actions, given its huge profits and recent staff cuts.
“ANZ customers would have every right to be jumping on the net tonight and looking around at the many better deals on offer from other financial institutions,” he said in a statement.
