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ING DIRECT lifts rate 0.3pc

Staff Reporter 4 minute read

By: Jessica Darnbrough

Rising funding costs have prompted ING DIRECT to lift its variable rate by 0.3 per cent – five basis points above the Reserve Bank and the big four.

ING DIRECT’s head of treasury Glenn Baker told The Adviser the overall cost of funding continues to rise on the back of portfolio re-pricing.

Older, cheaper funding has matured over time and is being replaced by new funding at a higher cost – this is most evident in the area of longer term wholesale debt issues.

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Mr Baker says the overall costs of funding will continue to climb until cheaper funding, than that which was acquired during the financial crisis, starts to positively affect portfolio pricing.

“However, this is unlikely to happen over the next 12 months,” Mr Baker says.

Speaking at a finance conference in Sydney late last month, ING DIRECT’s chief financial officer Mark Mullington said second tier lenders were facing long term structural disadvantages compared to the big four.

“Since the global credit crisis second tier banks are paying relatively more for funding than the big four and the longer term trend is for this imbalance to continue,” he said.

ING DIRECT lifts rate 0.3pc
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