The major banks have wasted no time in announcing a substantial proportion of the shock 1 per cent RBA rate cut will go straight back to the borrower.
Westpac announced a 0.8 per cent cut to its variable rate within minutes of the RBA’s announcement, followed promptly by CBA, ANZ, NAB and St George.
ANZ chief executive Brian Hartzer said 0.80 per cent was the maximum ANZ could pass on to borrowers at this stage.
“Australian banks are strongly positioned but maintaining acceptable financial performance has become even more important given the financial turmoil,” he said.
NAB executive director and CEO Ahmed Fahour said it was the bank’s priority to “maintain a healthy banking system” while balancing the needs of shareholders and customers.
The banks also emphasised that they would look to reduce lending rates further if and when funding costs permitted.
“Westpac will continue to monitor the external environment and our cost of funding position and will look to pass on further interest rate reductions where possible,” Peter Hanlon, group executive of retail and business banking at Westpac said.
CBA group executive of retail banking services Ross McEwan even suggested the Commonwealth Bank would reduce rates by more than the RBA once financial markets normalised.
“Our customers can also expect out of cycle interest rate reductions,” he said.
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