Westpac and ANZ increase rates

[Turbosnail]

Today Westpac followed ANZ's move to increase mortgage rates by a small amount whilst the Reserve bank left rates on hold. According to ABC, a spokesman Jason Yetton said "Our move today reflects the increase in costs of banks raining money".

As far as I have googled it, raining money means lending and the cost of lending has not increased, so why have Westpac and ANZ upped their interest rates? Is it to increase their profits or for a more favourable reason?

[Dimethyltryptamine]

dem greedy cunce

[Mornnb]

Originally Posted by Turbosnail

As far as I have googled it, raining money means lending and the cost of lending has not increased, so why have Westpac and ANZ upped their interest rates? Is it to increase their profits or for a more favourable reason?

It's to maintain existing profits. The banks acquire a lot of their funding from overseas borrowing. With the threat of a credit crunch in Europe, Australian banks are finding it more expensive to obtain funding.

[tayser]

Originally Posted by Turbosnail

Today Westpac followed ANZ's move to increase mortgage rates by a small amount whilst the Reserve bank left rates on hold. According to ABC, a spokesman Jason Yetton said "Our move today reflects the increase in costs of banks raining money".

As far as I have googled it, raining money means lending and the cost of lending has not increased, so why have Westpac and ANZ upped their interest rates? Is it to increase their profits or for a more favourable reason?

Says who?

Australia doesn't get 100% of its credit from domestic depositors - it is reliant on offshore funding which throws all sorts of risk and costs into the equation.

I am sick to fucking death of hearing whingers whinging about their fucking mortgages and subsequent interest rates.

If you're bitching about a 0.06 or 0.10 basis point increase in your SVR then YOU SHOULDNT HAVE GOT A MORTGAGE IN THE FIRST PLACE.

weeeeeerrking families and OZZZZZZIE battlers - go fuck yourselves and do your homework before getting yourselves into shit. It is YOUR (whoever you whingers are) fault you got hooked into the "great Aussie dream" BULLSHIT. YOU chose poorly if you're in the financial version of shit creek.

absolutely ZERO sympathy, vitriol - it's a beautiful thing sometimes.

[Joelby]

As much as it's popular to declare bank funding hasn't gone up in price and it's all bullshit, funding costs have actually has gone up. Doesn't mean our big 4 don't have enough buffer in their profits to wear it for a while though

[tayser]

Oh it's UN-OS-TRAY-LEE-UN that people are out to make a profit. TALL POPPY, QUICK, LETS CUT IT DOWN.

that's what's wrong with Australia - be it a large organisation making a shitload of profit or if some Australian comes up with a cure for cancer and profits from it, they'll have a shotgun pointed at their knees and cut down like a mother fucker all because the bogan-suburban populace gets sweet F.A. upfront benefit from it therefore they are E.V.I.L.

Oh get fucked!

[tayser]

I'll stop now

[Joelby]

haha no keep going, I agree with you

[Mornnb]

Originally Posted by Joelby

As much as it's popular to declare bank funding hasn't gone up in price and it's all bullshit, funding costs have actually has gone up. Doesn't mean our big 4 don't have enough buffer in their profits to wear it for a while though

They're obligated to maintain their profits for their shareholders. They aren't trying to be greedy, but responsible to their owners. Many of which will be average blokes with super funds.

[Locke]

It's a free country right? (well, so they say at least), so they can do what they want, their job isn't to be a lapdog for the govt or the Reserve Bank.

[Citystyle]

Originally Posted by Mornnb

They're obligated to maintain their profits for their shareholders. They aren't trying to be greedy, but responsible to their owners. Many of which will be average blokes with super funds.

Half correct. The banks are attempting to insulate themselves further from any new global credit/ economic issues.

It's good management that will ensure a damper on household expenditure and improve the strength of not just our banks but of household balance sheets.

Moves like this aren't going to help house prices.

[Dockside]

Originally Posted by Joelby

haha no keep going, I agree with you

+1, me too..

[ryan79]

Advice for people with mortgages - look for an offer elsewhere then threaten your bank your gonna move and ask if they can match the rate. They mostly will. I knocked .2% off a while ago. Looks like I might lose some of that.

The RBA are being a bit shit atm though. They really should have cut interest rates.

[bestofperth]

Why?

[AlphaBravo]

Agree with tayser here. I am sick of hearing about working families and battlers who expect a break at every turn.

When I worked in a bank people would apply for home loans, the bank many times didnt approve the requested amount but approved a lower amount based on the customers financial circumstances. This is sound lending practice.

The number of complaints that are generated because of this is amazing. They demand the higher amount even if they cant afford it. It shits me..

Then when rates move they whinge, moan and bitch and call it "unAustralian" for banks to increase lending rates. I find this attitude abhorrent. You asked for it, you signed up for it.

I hear alot of people saying banks are greedy and they make too much money and so this is reason for the bansk tio wear the increased costs. There seems to be argument that banks shouldnt make money..welll consider would you rather have your bank you deal with turning a profit or turning a loss? Would you keep your money in a bank that is making losses every year? I doubt anyone would say yes to that...

Politicians and media are the same, they see bank bashing as an easy scapegoat to "blame" for the woes of the "poor battler". Note to politctians: If govt restructured tax laws and rewarded people for saving (not super) rather than slugging them for it, then just maybe banks wouldnt have to rely as heavily on overseas markets for sourcing funds and just maybe that just might reduce the pressure on mortgage rates overall..

[Turbosnail]

My point is less about people finding it harder to make ends meet or having a moan about a banks right to make a profit which I think is a given but more about the logic of the decision. About half of banks lending will come from customer deposits and whilst I appreciate wholesale markets may be a little tighter to get lending from (wholesale banks are still making record profits) I am not convinced that putting interest rates up is a great decision in the face of some pretty strong competition for customers.

What I can't get my head around is that ANZ and Westpac seem to have shown all their cards to NAB and Commonwealth who can hold their rates and net a whole load of customers. I can't see how that is in shareholder interest.

[Mornnb]

Originally Posted by ryan79

The RBA are being a bit shit atm though. They really should have cut interest rates.

Nah, they shouldn't prolong the housing bubble by lowering the rates excessively, that would create more harm than good. They should only pay attention to inflation and unemployment rate.

[Solopop]

The benefits of not having a mortgage.

[brizguy]

People bitch and moan but won't change banks. If people actually did move away from the banks then it would get competitive.

[Fabian]

And thats the reason why exit fees were abolished, to encourage people to move lenders if they felt that the interest rates were too high.

We are quite lucky that there are so many lenders out there to choose from here in Australia. So much competition yet people cannot be bothered at seeking the alternatives.