ANZ looks unlikely to pass on the RBA's full 50bp cut when it makes its rate announcement on Friday.
ANZ boss Mike Smith has telegraphed the bank's intentions in a speech to the QUT Business Leaders' Forum in Brisbane, the Australian Financial Review has reported. Smith said funding costs have risen for banks in recent months, despite the RBA claim to the contrary.
"The [RBA] said that the costs of funding in the wholesale markets in the last few months have gone down, but in fact they have gone up again as a result of the last two days," Smith said.
Smith said even this price change was "irrelevant" when taking into account what funding was being replaced by new wholesale funding.
"A year ago, the amount we were paying would have been about 60bps less that what we are having to pay out now," Smith said.
Smith predicted, however, that the debate surrounding out-of-cycle moves will eventually ease.
"Give it a year and it will certainly not be as much of a hot point as it is right now," he said.
Bank margins not as bad as claimed