Those hard luck banks

by BN20 Apr 2012

The banks sure have had a rough go of things lately. They’ve copped so much public and political flak over the past couple years, with only their billions of dollars in profit to dry their tears on. It must seem cold comfort when they’re getting a dressing down from Treasurer Wayne Swan, or basically being called liars by overseas analysts like Societe Generale’s Christian Carrillo, who said their claims over higher funding costs were “mathematically impossible”. That’s why it must have felt really vindicating recently when RBA deputy governor Guy Debelle stated that banks really are facing higher funding costs: somewhere in the neighbourhood of 150-155bps higher than pre-GFC, to be exact. The Australian Bankers’ Association quickly jumped on Debelle’s comments, by issuing a statement that essentially said “told ya so”, and claiming that only half these increased funding costs had been passed on to borrowers. Of course, all this didn’t seem to make much of a difference to consumers, who slugged the banks with their first monthly decline in satisfaction since March 2011. Seems like these guys just can’t get a break. Except, of course, when it comes to profits.