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The costs of wholesale funds could continue to rise for the next 18 months, CBA’s chief financial officer David Craig has revealed.
Speaking at a conference for the bank’s September quarter earnings update, Mr Craig said the average cost of funding had been steadily rising for banks as they roll over cheap debt sourced from before the global financial crisis with more expensive borrowings.
The average term debt before the financial crisis was 3.6 years, with some of that having a maturity of five years.
"So we've got five years from the beginning of the crunch before the last of the cheap stuff's gone," Mr Craig said.
According to Mr Craig, deposits were now 0.75 to 1 percentage point more expensive for the bank than before the global downturn.
CBA said they would continue to manage the market and move the standard variable rate when appropriate.
At its quarterly results meeting yesterday, CBA reported a $1.4 billion cash profit, up from $1.1 billion this time last year.
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