ANZ has this afternoon confirmed that it will be raising its variable home loan product interest rates by 18 basis points for investors and owner-occupiers.
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ANZ and NAB have joined the Commonwealth and Westpac in pushing up mortgage interest rates out of step with the Reserve Bank.
Although the big four showed a few improvement in satisfaction over the a year ago (up 0.5% points), it was a number of the smaller banks that showed the largest gains.
“The rate of growth in credit for housing is, in aggregate, still accelerating”, Australian Prudential Regulation Authority chairman Wayne Byres told federal parliament’s house economics committee on Friday.
“The increase will partially offset the cost of fulfilling changed regulatory requirements that will increase the amount of capital that needs to be held against mortgages”, the bank advised in a statement.
NAB’s head of personal banking, Gavin Slater, said the decision was not easy, but was the right decision for the long term. Clearly, the banks have put their shareholders above their customers.
The warning comes as National Australia Bank on Friday lifted variable home loan interest rates by 0.17 percentage points.
The top financial regulator has suggested shareholders in banks may need to lower their expectations for returns as banks become less risky thanks to government policy changes.
In September, the CBA increased its lead in overall satisfaction (82.5%) among the big four with NAB in second place (81.4%).
With analysts forecasting that Westpac’s rate rise last week will actually see its return on equity this year rising (to 15.3 per cent, from 15 per cent, according to UBS), Labor’s Ed Husic pushed Byres on whether banks are grabbing too much from their customers.
Mr Byres said APRA’s estimate that the capital rules could add about 10-15 basis points to lending rates had been based on banks raising rates across all their home loans. The Bank of Melbourne increased satisfaction by 5.8% points over the year (to 87.0%), Teachers Mutual was up 5.2% points (remains market leader on 95.3%), Bank SA increased by 4.3% points (to 87.7%) and Bendigo Bank was up by 2.0% points (to 89.9% ).
And as night follows day, if the banks have to raise more capital, interest rates are sure to rise again.
“At the end of the day, customers can choose where they want to bank and shop and buy their milk”.
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In a note to clients, Deutsche Bank sais the out-of-cycle rate rises may not have finished as even more onerous requirements are likely to flow through from the next generation of “Basel 4” global regulations.
