Banks have claimed shrinking margins are at fault for their decision to hold back part of the RBA's rate cuts, but RBA figures show the situation may not be as dire as claimed.
Data obtained from the Reserve Bank by Dow Jones Newswires has indicated that the net interest margins of the major banks are at least 12bps higher than the lows reached during the GFC.
News Ltd has reported that ANZ has the highest net interest margin of the big four, at 2.51% for the first half of 2012. This compares to a low of 2.05% for the same period in 2009. CBA and Westpac followed, with net interest margins of 2.2% and 2.19%, respectively. NAB has yet to report its half-year results.
But a financial analyst has defended the bank claims of shrinking margins. BBY senior analyst Brett Le Mesurier told News Ltd net interest margins were in the eye of the beholder.
"Whether you have the view that bank margins have increased depends on your starting point. It's fair to say they've passed on the increased cost of funds to borrowers but their capital requirements have also increased. The cost of this has been borne by shareholders," Le Mesurier said.