Backlash against big four
Home owners fed up with rising interest rates are turning their backs on the big four banks.
Home owners fed up with rising interest rates are turning their backs on the big four banks. HOME owners fed up with rising interest rates are turning their backs on the big four banks, with latest figures showing the number of new mortgages signed with small banks is growing at twice the rate of housing loans being taken out with major institutions.Australian Prudential Regulatory Authority figures show that in 2011 the number of new mortgages signed at smaller banks grew by 14.8 per cent, while new mortgages with Westpac, the Commonwealth Bank, ANZ and National Australia Bank grew 7.8 per cent.Treasury estimates the value of the mortgages held by the smaller banks is now $9.7 billion. But while the figure is steadily growing, it remains dwarfed by the big four's combined mortgage book of $586.5 billion.The figures came as Westpac admitted to censoring its social media sites, deleting criticism of its actions, and as an angry Prime Minister Julia Gillard and Treasurer Wayne Swan urged customers not to simply accept Friday's decision by Westpac and ANZ to lift their interest rates independently of the Reserve Bank.''The fact is there are better deals around and if customers are unhappy with their financial institution, I urge them to ? think about changing,'' Mr Swan said. When asked if the big four banks were bastards, he said: ''They are out of touch with their customers, they are treating their customers badly.''The Commonwealth Bank and National Australia Bank are yet to announce whether or not they will follow Westpac and the ANZ, but a NAB spokesman said it was committed to having the ''lowest standard variable home loan rate of the major banks''.The Commonwealth echoed the line that its rates were under review, as did the Bendigo and Adelaide Bank. Only the Bank of Queensland said it would keep its standard variable home loan interest rates steady.But AMP Capital chief economist Shane Oliver said it was likely other banks would take Westpac's and ANZ's lead.''When one moves the others tend to follow,'' he said.Dr Oliver said this should prompt the Reserve Bank to cut the cash rate next month, which in turn should force the banks to retract their rises.''The last thing Australia needs right now is mortgage rate increases and that's what we've ended up with,'' he said.Housing Institute of Australia managing director Shane Goodwin blasted the banks' decision.''This is unjustifiable,'' he said. ''This will have an impact in terms of families buying houses. We all thought interest rates were on a downward spiral but this is a huge blow to confidence.''Westpac and ANZ, however, argue the rate rises were needed because they are facing higher costs as a result of increased competition for new deposits.But in a sign of its increasing sensitivity to criticism, Westpac is now censoring its social media sites amid growing anger over the rates hike and its decision to retrench up to 560 local staff.Negative comments posted on Westpac's Facebook page over the past week have been deleted within minutes, prompting accusations that the bank is on a ''propaganda campaign''.Westpac has defended the practice, claiming that ''partisan views'' could deter customers from researching financial products promoted on the sites.The Financial Sector Union has responded by establishing a rival Facebook page, which provides a forum for staff and customers to vent their anger.Last Saturday night, several bank workers posted comments that questioned Westpac management's decision to shed staff after posting a record profit of $6.3 billion for the year to September 2011. The comments were removed within minutes.Westpac has also announced a new social media policy that bans full-time staff and contractors from disparaging their employer on networking sites such as Facebook and Twitter. Staff who fail to comply with the bank's strict guidelines could face dismissal or legal action.A Westpac spokeswoman did not deny that comments had been removed from the company's website, but said all feedback was circulated to senior management. Withwith Stephen Cauchi