ANZ today announced it would increase interest rates for variable rate mortgages by 0.20% pa, effective Wednesday, 9th January following sustained increases in wholesale interest rates associated with the effects of the US sub-prime lending crisis on global liquidity and money markets.The effect of the US sub-prime lending crisis has seen banks facing significantly higher borrowing rates in the money markets, which has impacted lenders margins for several months. It has become clear that the increased funding costs will be in place for some time, and accordingly it has been decided that a portion of this increase be passed on to customers in the form of higher standard variable interest rates.
Should the global liquidity conditions ease, and funding costs decline, ANZ is committed to passing reductions in wholesale interest rates to customers through reduced mortgage lending rates.
And oh by the way we are cutting the Chief Executive and all Directors salaries by 0.2% as well – That will be the day !!!!
Richard Taylor | Australia's leading private lender
Hey Richard;
"sheep" is my saying!!
I love that word.
But I don't think it applies to Banks unfortunately; they're the wolves.
I hear the word CEO these days and a dark cloud forms over my head.
The Federal Treasurer was queried over this issue this morning on ABC Radio – said a great deal about nothing. When pushed about controlling the banks or the abilty to stop the banks from making excessive profits he continued to push that borrowers should vote with their feet if they don't like what the banks are doing.
I have a slightly different thought at present. It is indeed a rarity (if not a first) to see a standard variable rate at three different rates with 'the banks', and such a variety of fixed interest rates. Tells a story in itself really if you think about it. But here is some food for thought…….
1) Banks are businesses. A business that does not return a profit, or loses money (or in the case of an ASX listed entity like the banks, DOES incur the wrath of shareholders if not showing significant growth and profits.
2) Fact – for whatever reason, the majority of people are simply too gutless to leave the majors. Many brokers push this barrow (which for anything other than a basic loan is fair enough too….) but essentially unless a bank says 'no' or a broker steers you elswhere (for the bigger commissions in that case usually) people stay with the banks – then complain. Go figure.
3) Regardless of what many may 'feel', if the likes of non banks and smaller lenders have been hit hard, of course the banks too will be hit, as between 40-60 % (rough guide) of loan funds does come from 'non deposit' sources. most have been saying not 'if' a non – reserve insitgated rate rise happens, but 'when' – no surprises really is there? Just check out the ASX to see what a rough ride is happening 'economy wise'.So……..the answer? Fix those rates, and make the most of any free services of 'professional' (so called) packages. Or show some spine and go to one of the 'securitised' non bank lenders……No? Did'nt think so.
It seems the sheep are following on! I think it was on the news last night Commonwealth Bank raising their rate.
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