Tariff turmoil reshapes cash rate outlook
Several lenders have updated their cash rate forecasts, following fallout from the US tariff announcements.
National Australia Bank (NAB) is now predicting the Reserve Bank of Australia (RBA) to ease rates more quickly through mid-2025, taking the cash rate to 2.6 per cent by February 2026, after US President Donald Trump unveiled a 90-day pause on plans to hike tariffs on most countries except China.
The major expects the RBA to cut rates by 50 bps this month, followed by 25 bps in July, August, November, and February.
This comes after ANZ moved its rate forecast on 4 April, predicting 25-bp cuts in May, July, and August “in order to offset some of the potential negative impacts arising from global trade and growth risk”. However, it has not ruled out a 50-bp cut in May if “sentiment sours and the global growth outlook deteriorates sufficiently.”
The Commonwealth Bank of Australia (CBA) expects the RBA to cut the cash rate this month by 25 bps given “the deteriorating global outlook … despite Australia being in a relatively good position to weather the storm” and two further rate cuts this year to take the cash rate to 3.35 per cent by end 2025.
Westpac is also calling a 25-bp cut in May with two more 25-bp cuts from the RBA in the second half of the year.
MyState and Auswide announce launch of broker pilot
Auswide Bank and MyState Bank have announced the launch of a broker pilot program as part of their initial steps following the mutual lenders’ recent merger.
In February, the Bundaberg-headquartered lender Auswide Bank (Auswide) became a subsidiary of Tasmanian-based lender MyState Bank Limited (MyState), alongside asset finance lender Selfco and wealth and commercial lending arm TPT Wealth.
The newly appointed general managers of the two banks, Tim Newman (general manager, MyState Bank) and Damian Hearne (general manager, Auswide Bank), have now said that one of the first projects to roll out from the merged entity aims to expand support for the broker channel.
Speaking to The Adviser, the two GMs said that the pilot will enable business development managers (BDMs) to represent all products and services across both banks, as well as Selfco (asset finance) and TPT (commercial lending).
Newman described the broker pilot as a foundational step: “The merger enables us to invest in what our proposition is over time. But, eight weeks in, we’re starting with the broker pilot. The support that we offer will enable them to have a business development manager who can offer multiple solutions … I think it broadens our proposition.”
Westpac denies it ignored suspected RAMS home loan fraud
Westpac is defending itself in Federal Court against allegations from its head of audit, risk, and compliance, Samantha Aitken, regarding alleged mortgage fraud at its RAMS Home Loans franchises between June 2022 and early 2023.
Aitken claimed executives ignored her warnings about staged wages, document falsification, self-referrals, and unaccredited referrers, also allegedly involving Westpac and St.George lenders. She alleged her requests for broader investigations and disclosure were denied, leading to negative repercussions for her career.
Westpac denied these claims, saying it took appropriate action. The case, which largely focuses on HR/employment issues, is heading to mediation.
CBA changes its treatment of HELP debt
The Commonwealth Bank of Australia (CBA) has confirmed it is rolling out new assessment criteria for its treatment of student debt.
Under the new assessment criteria, CBA will exclude Higher Education Loan Program (HELP) debt from home loan servicing calculations for borrowers who can repay their HELP debt within 12 months.
For borrowers who are able to repay HELP debt between one and five years, CBA is also piloting assessing home loan serviceability with a lower assessment rate buffer of 1 per cent.
Dr Michael Baumann, CBA executive general manager, home buying, commented on the change to its lending policy, saying: “At CommBank, we are committed to helping all Australians, including those with a HELP debt, in their home-buying journey, by providing a range of flexible lending policies, competitive rates, innovative tools, and expert guidance.
“We regularly review and monitor our home loan policies and processes to meet customers’ needs while upholding prudent lending standards.
“Following APRA’s recent statement regarding HELP debt, we have introduced alternative home loan servicing methods for customers who can repay their HELP debt within five years. This will allow eligible customers to achieve their home ownership goals sooner.”
