ANZ raised it standard variable rate by 6 basis points, or 0.06 percentage point, to 7.42percent, effective April 20.
“ANZ’s decision to whack its customers at a time when many of them are doing it tough flies in the face of recent Reserve Bank statements saying funding costs for banks have eased,” said Australian Treasurer Wayne Swan.
ANZ Bank Chief Executive Officer Mike Smith is among Australian bank executives fighting to maintain earnings as demand for mortgages tumbles to the weakest level since 1977. Home-loan approvals fellfor a second month in February on the fastest exodus of first-home buyers in a decade, increasingpressure on the central bank to cut interest rates as consumer confidence weakens.
“The funding environment changed quite dramatically in late 2011 as a result of the economic andfinancial crisis in Europe,” Philip Chronican, ANZ’s chief executive officer of Australian operations, said in an e-mailed statement yesterday. “This has seen wholesale funding costs rise and competition increase dramatically among banks for deposits.”
ANZ’s move follows the decisions by Australia’s other three biggest lenders -- CommonwealthBank of Australia, National Australia Bank Ltd. and Westpac Banking Corp. -- to raise variable mortgage rates by as much as 10 basis points in February, citing higher wholesale funding costs.
The decision by the four pillar banks, named for a law that prevents them from buying each other, toincrease rates independently from the RBA has drawn criticism from the government.
“There would be a lot of ANZ customers very upset about this decision to jack up rates, coming after their recent massive profit announcement and staff sackings,” said Swan.
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