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ANZ defends rates

by Staff Reporter7 minute read

ANZ has defended its funding position at the Senate Inquiry into banking competition.

According to an article in The Australian Financial Review, the Australia Institute submitted information to the Senate, claiming that ANZ actually spent less on interest costs in 2010 than in 2009 – a trend which is at odds with the lender’s argument that cost of funds is rising.

According to the AFR report, ANZ did not dispute the calculation, which were based on the bank's annual report, however ANZ’s head of government and regulatory affairs Jane Nash described the analysis as "simplistic'.

Late last year ANZ’s chief executive Mike Smith told the banking inquiry that the total cost of funding mortgages had risen more significantly than the Reserve Bank cash rate.

"Over the same period the ANZ has risen its standard variable mortgage interest rate by approximately 1.2 percentage points above the Reserve Bank of Australia's interest rate movements and this is broadly in line with the higher cost of funds,” he said.

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