Major Australian banks act independently to hike interest rates

In an unprecedented move, major banks ANZ and Westpac, of course acting independently, decided today that despite the Reserve Bank holding rates steady on Tuesday, they would increase their home loan variable interest rates, by 6 bps and 10 bps respectively.

This is sure to bring lots of negative publicity to their brand and branches around Australia.

ANZ indicated a couple of months ago they would no longer be referring to the central bank interest rate moves to guide their own policy, instead holding their own monthly interest-rate-setting meetings, and then communicating to the market what home loan rate changes they will make, on their own.

Westpac, despite admitting that reducing rates in November and December by half a percent was the right thing to do for the economy, 8 weeks later they are increasing rates by 10 bps citing increased cost of funds impacting their business.

In the first week of November Westpac announced a record profit of $6.3billion. For the year ended 30 September last, ANZ announced a 19% rise in Net profit after tax to $5.36billion.

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