ANZ falls back into line on rates

04/11/2009

ANZ Bank further clarified its position on rate rises yesterday and backed even further away from an apparent pledge last week by chief executive Mike Smith not to raise rates outside of rate rises by the RBA.

Early last week smith said he would be reluctant to increase home-loan rates above RBA adjustments, given the fragile state of the economy. Late in the week he said he would not be "stuck on my own", so ANZ would respond if other banks chose to lift their rates outside moves by the RBA.

Yesterday ANZ deputy chief executive, Graham Hodges, said mortgage margins were under pressure from rising average funding costs. "If sustained over time, there will be commercial pressure to pass the additional costs on," Mr Hodges said.

"Right now, it's in everyone's interest that the recovery consolidates and the right thing to do at this point in the economic cycle is for us to absorb the additional funding costs and pass on only the amount of today's official increase to our mortgage and small-business customers."

Source: The Australian

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