Bendigo flags independent moves

by Adam Smith07 Feb 2012

Majors aren't the only ones set to make a break from the RBA, with a second-tier planning to move independently as well.

Bendigo chief executive Mike Hirst has told the Australian Financial Review the bank was looking to provide customers with "better transparency" around its mortgage pricing, but that it would work independently of RBA moves.

"You have seen [ANZ CEO] Mike Smith setting away from the official cash rate change, and we have indicated that we will be doing that as well," Hirst said.

Hirst said the bank had not "worked through the mechanics yet" of how and when it would explain any rate moves - or the lack thereof - to its customers, but said consumers should know that bank funding costs had drifted from the official cash rate.

"I think that people have to understand that the Reserve Bank official rate hasn't got a strong correlation to banks' cost of funds and on that basis banks need to look at their cost of funds rather than the official cash rate," Hirst said.

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