ANZ has given little hope to its mortgage customers that they will feel the full benefit of the Reserve Bank of Australia’s (RBA) latest interest rate cut.
The four major banks on Thursday largely maintained their silence on whether they had decided to follow the RBA’s move and slice lending rates by a quarter of a per cent.
ANZ Australia boss Philip Chronican was the only one to comment, telling reporters all would be revealed when the bank holds its regular rates meeting on October 12.
But he gave his customers little reason to expect their mortgage repayments to fall by a quarter of a per cent, saying the RBA’s cash rate has no effect on ANZ’s funding costs.
“Our cost of funds doesn’t change on the first Tuesday of the month when the Reserve Bank moves its cash rate, we fund ourselves through a range of term deposits or even wholesale funds,” Mr Chronican told reporters.
“We’re trying to create a gap between the Reserve Bank’s move.”
None of the four major banks have reduced their variable home loan interest rate, since the RBA cut the cash rate to 3.25 per cent, its lowest level in three years, on Tuesday.
All the Commonwealth Bank and Westpac would say on Thursday was that their rates were under review.
The National Australia Bank also repeated its commitment to have the lowest variable rate of the four major banks.
The RBA’s rate cut prompted industry groups, politicians and retailers to urge the four big banks to pass on the interest rate cut in full.
Australian Chamber of Commerce and Industry (ACCI) director of economics and industry policy Greg Evans said as the funding pressure for banks had significantly eased they no longer had a reason to hold back on rate cuts.
But Mr Chronican claimed the bank still had to consider its full range of funding costs before making a decision on interest rates.
“Sometimes when the Reserve Bank moves its cash rate down, long term rates go up, sometimes long term rates go down,” he said.
“We want to give the market time to settle and see how our rate structure works.
“We felt it appropriate to be able to look at the full range of funding costs when we made our decision and the best time to do that was with the lag after the Reserve.”
While the big four banks kept mum on rate cuts, ING Direct said it would pass on the RBA’s interest rate cut in full, slicing its variable home loans by 0.25 per cent.
The Bank of Queensland has already reduced its variable home loans by 20 basis points.
