ANZ holds fire in first solo review

by Ben Abbott16 Jan 2012

ANZ announced on Friday it would keep interest rates on its retail mortgages stable this month, in its first review of interest rates independent of the Australian central bank.

At the time of its decision not to raise interest rates in December, ANZ promised to review rates independently of the Reserve Bank on the second Friday of every month.

In January - a month where the RBA did not meet - ANZ rates for home loan customers will be stable.

Reiterating its rationale for breaking with the RBA cycle, ANZ CEO Philip Chronican said in a statement to the market that it could now reflect sustained changes in funding costs.

He said these costs were a combination of interest paid on deposits, and money paid to investors in wholesale money markets where Australian banks raise the majority of their funds.

“It helps us to contribute to an informed debate about how we fund our customers’ loans and the effects of the continuing global financial crisis on Australia, particularly the significant economic instability which currently exists in Europe," Chronican said.

“We want the process of setting interest rates for our customers to be simple and transparent. This includes a promise to work hard to maintain competitive interest rates that will not disadvantage customers over the term of their loan," he said.

As part of the January review, ANZ warned that higher interest rates being paid on deposits as well as elevated prices for funding will be sustained this year due to economic volatility.



  • by JBJB 17/01/2012 10:12:51 AM

    The media awaits ANZ's first attempt to increase out of cycle with baseball bats. Good luck ANZ.