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LENDING & CREDIT | Cesar Tordesillas, Australia
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ANZ to protect margins with increased interest rates

ANZ chief executive Mike Smith  promised to protect future profits by again raising lending rates independently of the Reserve Bank.

 

He blames political posturing for a major margin contraction.

ANZ recorded a $1.48 billion underlying profit in the first quarter, up 4.1 per cent, which analysts said was the healthiest among the major banks.

But the Australian business suffered a nine basis point decline in its net interest margin, after it was hit with higher wholesale funding and deposit costs.

Mr Smith said this was due to political pressure that impeded banks adjusting interest rates.

"That is the result of continued pressure on deposit payments and our inability to move rates quicker than we would have liked," he said referring to the government's campaign to have rates capped by the RBA's decisions.

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