ANZ lifts interest rates

goldpelican

goldpelican

Well-Known Member
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ANZ Bank made good on its threat to lift mortgage rates independently of the Reserve Bank by nudging up the interest rate on its standard variable loan today.

The bank raised its standard lending rate by 6 basis points, or 0.06 percentage points, to 7.36 per cent, effective from February 17.

While the increase is modest in size, it is likely to prompt other major banks to follow suit. The bank's move is also aimed at underscoring its intention to maintain profit margins in the face of anger from borrowers and politicians alike.

The Reserve Bank earlier this week surprised pundits by leaving its key cash rate unchanged at 4.25 per cent. A rate cut of the typical size of 25 basis points would have given the ANZ and other banks cover to pass on a smaller rate reduction. Since the RBA didn't move, the ANZ's solo action is even more conspicuous.

Read more: http://www.theage.com.au/business/anz-lifts-interest-rates-20120210-1sflr.html#ixzz1lws7J7kN
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Wake up call for mortgage holders. Wonder how many people think the RBA is still in control, given that the market appeared to have priced in an expected rate CUT that didn't eventuate on Tuesday.

Expect their next move to be bigger. Won't be surprised to see a 0.1% independent rise, then 0.25% etc.
 
Bank term funding costs are completely independant of the RBA cash rate. People still struggle to see that. Given NAB just paid 6% to borrow money for 5yrs, a 7.36% mortgage rate doesnt seem that bad..

Also, ANZ cut their 3yr variable by 15bps
 
''And what I say to Australians who are observing these decisions, this one from the ANZ, is you do have the capacity to walk down the road and get a better deal.''

Asked if he expected the other major banks to follow ANZ's lead, Mr Swan said ''we'll have to wait''.

''But my comments apply equally to anyone else, who should take a decision such as this,'' Mr Swan said.


Read more: http://www.theage.com.au/business/angry-anz-customers-can-walk-swan-20120210-1si5n.html
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Thank heavens we have the best trearurer in the known universe on the case. What would Max Keiser say to Mr. Swan I wonder? Any guesses?
 
Lowered their fixed rates though - I am now in the process of fixing some of my loans with them for either 5.84% or 5.69% for 3 years pending outcome of my employers deal with them. Either way I'll pull the trigger as I can't see it getting to much better (i.e. fixed rates in the worrst of the GFC fell to 4.95% for 3 years and that was for about a week before climbing again) but it could get a lot worse.
 
wbc didnt even pas on the 2*25 points drop before xmas automatically, you had to ring up and ask for it...f'en bastards
 
Its called Deregulation, government sold it soul. Notice how there is no collusion between banks, they just do it on same day by coincidence . Well i will move my cash to a Building Society if thousands do it Banks may just get the point, instead of sticking the point up us!
 
i wouldnt be surprised if the Rothchild's are laughing at anyone that thinks that any bank is any different to any other bank ... let me control a nations money supply and i care not who makes its laws ....
he should have added - or reports it's news ...
 
Lift variable rate and lower fixed rate. From a business perspective, if you know you are in for difficult times over the next 2-3 years you want to plan adequately to ensure you have an enough of an income flow to get you through the tough times so that if and when the better times arrive you will be in a position to act more quickly than your competitor.

I'm still getting my head around yield curves (well not really but there are too many interesting topics popping up on SS that distract me), but the banks are expecting interest rates to decline over the next 2 - 3 years. What ANZ is attempting to do is to scare punters off the variable rate and lock in for a short term at a fixed rate higher than what is anticipated to be the variable over the next 2 - 3 years. Lock in a contract, ensure maximum return, and the ability to plan more effectively with a guaranteed income stream becomes easier.

Thoughts?
 
at least anz is moving, free market operates much more effectively when the choices are not identical clones of each other, this should throw some spice into the mix
 
Bumping up rates a slight fraction and scaring everyone into fixing. Me thinks a few more rate cuts by the RBA might see the banks laughing in a few months
 
This is the f#%Ed up part of how capitalism and democracy has become.

This is how I see the near future of finance going in Australia:

The big four have leveraged themselves to the hilt on the Aussie housing market for years now at the expense of Business lending. 100% plus lends even in a boom can not be considered prudent banking practices as just one example. They average about 50% of thier assets tied up in residential mortgages. They got a free kick from the Fed, RBA and the government during the GFC and as a result made record profits, paid out nice dividends to share holders and even nicer pay outs to CEO's.

Now the screws are being turned on them through higher funding costs. Instead of taking a short term hair cut on profits they are squeezing every last drop out of thier clients in order to maintain or beat record profits to keep the share holder and CEO gravy train going. Now, in any other business I would say that's fine because it is a free market after all, but this isn't, although the market is turning on the screws of the RBA, like I have said all along it would eventually do.

So now with a downward spiraling world economy and a very bleak outlook on the Aussie one also, the banks are squeezing every last drop out of people. This will put the already struggling "sub prime" borrowers over the edge. So many that bought in recent years in negative equity already (banks largest asset starting to devalue). Job losses seem to be the consistent theme in the news lately meaning many may have to sell and go back to renting in a negative property market (more housing decline adds to the snow ball). Add to that many that are looking at hugely leveraged assets taking losses and people will jump ship adding further snow to the ball.

Sooner rather than later, CBA, NAB, W-PAC and ANZ are not going to be able to hide the huge devaluation of thier absurdly largest asset. Take it from me, thousands of people right now in every state can not move thier mortagaes because valuations have come back well under what people hoped and many below what they paid for them. When this happens do you think the bank goes back and changes its asset sheet to reflect the new valuation? Not bloody likely! It cant last for ever though Whole sale lending markets are not going to miss this for long with whole markets around Australia recording large drops but bank balance sheets remain steady. Then they will ratchet up the risk rating which will put further upward pressure on their ability to borrow.

The cycle continues until a pop! Don't for a second think our banks are any better than US or UK banks pre GFC who had massively less exposure to residential mortgages than our banks.

If this were true capitalism, these banks would be cutting profits right now and easing the pain on thier customers because it is good for business long term, as they may stave this off the longer people are able to pony up on thier over leveraged assets. But they won't, because this will be another round of privatised profits and socialized losses when the bubble pops and they get bailed out again.....

The RBA has one option right now that could keep them relevant for a bit longer. Print the 350-400 billion required to buy up all the offshore lending the banks are doing. But they won't and they will print a whole lot more when this house of cards comes tumbling down. So the little guy will lose again.

I have had a gut full defending capitalism to socialists because of this cronie capitalism dressed up as something pure and good.

rant over,
 
Lovey80 said:
I have had a gut full defending capitalism to socialists because of this cronie capitalism dressed up as something pure and good.

rant over,
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can't argue with that, if only the government would realise the damage its meddling does? End the Reserve
 
I'm anti-debt, so it doesn't affect me directly.
However, I'm concerned about the rates for savings accounts @_@
 
hiho said:
Lovey80 said:
I have had a gut full defending capitalism to socialists because of this cronie capitalism dressed up as something pure and good.

rant over,
Click to expand...

can't argue with that, if only the government would realise the damage its meddling does? End the Reserve
Click to expand...

I think we need a central bank, just not one that manipulates the price of money.
 
Lovey80 said:
hiho said:
Lovey80 said:
I have had a gut full defending capitalism to socialists because of this cronie capitalism dressed up as something pure and good.

rant over,
Click to expand...

can't argue with that, if only the government would realise the damage its meddling does? End the Reserve
Click to expand...

I think we need a central bank, just not one that manipulates the price of money.
Click to expand...

What would that achieve? :/
 
Allowing the free market to determine the price of money? Which would be self correcting when imbalances came. No false signals, no (or limited) excess credit hitting the market creating bubbles and the inevitable painfull corrections.

Central bank should be there just to print money when the set amount of gold/silver comes in and settle trade defecits with nations annually.
 
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