Rate cut race begins

by Adam Smith08 Oct 2012

Commonwealth Bank, Westpac and NAB have announced cuts in the wake of the Reserve Bank's cash rate reduction, but none have passed on the full 25bp drop.

NAB moved first on rates, passing along 20 of the 25bp cut. The reduction brings the major's standard variable rate to 6.58%. 

Commonwealth Bank followed suit, also cutting 20bps from its standard variable rate, dropping the rate to 6.6%. The bank pointed to shareholder and depositor interests in defence of its partial pass-on.

"In making this decision, (CBA) has continued to balance the needs of 1.8 million home loan borrowers with those of its 11 million depositors and its shareholders, who include 800,000 Australians who own its shares directly, and millions more Australians who own shares through pension funds," CBA said.

Westpac cut its standard variable by 18 basis points, brining it to 6.71%.

“In coming to this decision we have sought to balance the needs of our mortgage customers with those of our millions of savers, particularly retirees who depend on the income from their deposit accounts," said Westpac's group executive retail and business banking, Jason Yetton.