Two more defy Swan
AUSTRALIAN banks have drawn a line under profit margins, with each of the big four lenders pushing through its own out-of-cycle interest rate rises.
AUSTRALIAN banks have drawn a line under profit margins, with each of the big four lenders pushing through its own out-of-cycle interest rate rises.Commonwealth Bank and National Australia Bank have become the latest to raise their variable lending rates outside the Reserve Bank's regular monthly cycle.The rates drama began as Westpac and ANZ defied Treasurer Wayne Swan and lifted variable rates by0.10 and 0.06 percentage points respectively on Friday, after the RBA held its cash rate steady.NAB said last night it would lift its standard variable home loan interest rate by 9 basis points to7.31 per cent. Earlier CBA, Australia's biggest mortgage bank, announced that its standard variable mortgage rate would rise 10 basis points to 7.41 per cent.For both, the rate rise takes effect from Monday.Investors welcomed efforts by banks to pump up profit margins, sending shares in the big four higher yesterday. ANZ, which also detailed an aggressive program of job cuts, finished 1.6 per cent higher at $21.77. Shares in Westpac and NAB both closed up 1.4 per cent.Commonwealth Bank closed up 41?, or 0.8 per cent, at $50.29.Also yesterday, Bendigo and Adelaide Bank increased its standard variable mortgage rate by 15 basis points to 7.45 per cent.In the space of a week borrowers have gone from expecting an interest rate cut to being hit with a rate rise.Still, the rate moves may have a silver lining. Analysts say the higher cost of credit through the economy has increased the chance that the Reserve Bank will cut its official cash rate next month.As with other banks, CBA blamed the rate increase on rising funding costs, adding that greater uncertainty emanating from Europe was exacerbating the situation."In making this decision, we have been cognisant of our total funding costs, of which the official cash rate is only one factor," said CBA's group executive of retail banking, Ross McEwan.