All the big banks have rejected pleas by the Government and customers to pass on the cut to interest rates in full.
The Reserve Bank slashed the official cash rate on Tuesday to a new record low of 0.75 per cent.
The Commonwealth Bank and NAB were the first to jump out of the blocks on Tuesday, confirming it would hang onto part of the cut.
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Comm Bank will cut its standard variable home loan interest rates by just 0.13 per cent.
NAB will cut its by 0.15 per cent.
On Wednesday both Westpac and ANZ confirmed they too would not pass on the full rate cut.
Westpac will reduce its standard variable home loan rates by 0.15 per cent.
ANZ’s will be cut by 01.4 per cent.
Both banks have defended the move arguing they had to consider all stakeholders.
“In making the decision, we took into account the reduction of the official cash rate and the commercial pressures of the low interest rate environment,” David Lindberg, Westpac Chief Executive, Consumer said.
“For an owner occupier customer with a standard variable home loan of $400,000 on principal and interest repayments, this reduction could result in a saving of $36 per month, or $432 each year.
ANZ had a similar spin.
“This was a considered decision balancing the needs of our customers in a low rate environment as well as the performance of our business and our role in stimulating the economy,” ANZ Group Executive Australia Retail & Commercial, Mark Hand said.
“We were able to match the full rate reduction in July and the majority in June, however the dynamics of record low interest rates has resulted in a reduction in variable home lending rates of between 0.14%pa and 0.25%pa this time around.
Treasurer Josh Frydenberg had earlier savaged Commonwealth and NAB for failing to pass on the cut in full, urging customers to vote with their feet.
But he conceded there wasn’t much he could do about it, amid calls for the Federal Government to force the banks to pass on the full cuts.
“We’re not about to legislate it, but as the RBA has made clear and we have made clear, the cost of borrowing for the banks has come and they should pass on these benefits to consumers.” Mr Frydenberg told Seven.
Opposition Leader Anthony Albanese described it as a disgrace, but pointed the finger at the Government.
“The banks need to pass on the interest rate cut in full and the Government need to do something about, they cant just sit back as spectators while all of this occurs,” Mr Albanese said.
“Interest rates are now below 1 per cent for the first time in history, what does it take to shake this Government out of its complacency when it comes to the need to manage the national economy.”