Industry analysts are pointing a scrutinising finger at bank interest rates amidst falling bank bill rates, growing bank revenue and speculation that the RBA will cut the official cash rate next month.
According to Macquarie Bank's interest rate strategist Rory Robertson, market conditions are such that banks could cut mortgage rates immediately should they wish to do so.
Robinson argued that "robust revenue growth" reported by the majors combined with a sharp fall in the 90-day-bank-bill-rate meant that banks were growing their profits despite difficult conditions globally.
Senior economist at BIS Shrapnel, Richard Robinson, agreed with Robertson stating that the bill rate which had topped out in March, had remained consistent through to July and come back sharply in recent weeks.
"That doesn't mean that the credit crisis is over but some of the pressures from that are starting to ease, and banks now enjoy a very healthy margin," he said.
According to Robinson, banks were now enjoying margins far higher than the average experienced up until 2007.
"Currently the average variable rate is about 9.6% and the average bank bill rate is about 7.32%," he said "So whether it's over the official cash rate or over the bill rate, banks have got scope to cut rates."
However, banks have remained non-committal.
"The RBA hasn't reduced interest rates and at this stage, it's speculation that they'll do so," a spokesperson from the CBA said, adding that the bank had the lowest standard variable rate of the major banks and had "not passed on the full cost of funding to customers."
"If the RBA cuts rates then the Commonwealth Bank will review its rates," he said.