Making headlines today, The Australian Financial Review has reported that Australia’s big banks are poised to lift rates above the RBA.
According to a new report published by Deutsche Bank, the banks are gearing up to raise interest rates in a bid to claw back weaker profit margins.
Deutsche Bank analyst James Freeman wrote in the report that he expects banks to lift interest rates by approximately 20 basis points above the RBA over the next six months.
The report comes as Treasurer Wayne Swan urged Australia’s big banks last week not to “gouge customers by raising rates above any future movements by the independent Reserve Bank”.
If the banks do choose to move, it will contradict what Westpac’s chief executive Gail Kelly told borrowers earlier this year.
After announcing the bank’s $3 billion half yearly profit, Ms Kelly told borrowers in May that the bank had no intentions to move out of step with the RBA.
While Westpac’s bank funding costs and charges remained under pressure, Ms Kelly said the major was well-funded.
“It’s not on our agenda to increase our mortgage prices over and above what the RBA may do,” she said.