Major carves rates

by Adam Smith08 Jun 2012

The first major bank has made its move following the RBA's cash rate reduction.

ANZ has passed on the full 25bp RBA cut to borrowers, dropping its standard variable rate to 6.80%. The bank said it would also carve 25bps from its business lending rates.

ANZ Australia chief executive Philip Chronican said that funding costs remain high, but claimed the bank had decided to absorb the pressures to pass on relief to mortgage holders.

"The bottom line is that while deposit customers are receiving very competitive deposit rates, many of our borrowing customers are under pressure from a range of other costs. We felt that reducing interest rates by 0.25% for home borrowers and for small business was the right decision in these circumstances," he said.

Chronican said ANZ had decided to "absorb its share of the burden" in passing along the full RBA reduction.

"Hopefully this decision will help relieve some of the pressures that we know homeowners and small businesses are facing at present," he said.