Westpac follows ANZ in rate hike

by Adam Smith13 Feb 2012

Westpac has followed ANZ in raising its rates in light of the RBA decision to hold steady.

The bank announced on Friday it would lift its standard variable rate 10bps to 7.46%. Westpac Group executive of retail and business banking Jason Yetton said the move reflected the bank's increased funding costs, and defended the rate rises as ensuring a strong banking system.

"Australia benefits from a strong banking system that supports the Australian economy. We need our banks to be strong to protect the interests of all Australians, whether they be depositors, home buyers, retirees, business borrowers, employees or shareholders. Over the past four months intense competition for term deposits has increased their cost to us by around 0.30%, while wholesale funding costs have also risen significantly," Yetton said.

Westpac also argued that the majority of its home loan customers would not pay the full 7.46%. The bank said more than 90% of its home loan customers had discounted rates.

Westpac's rate rise follows the move made by ANZ to lift its standard variable rate by 0.06% to 7.36%. But while taking with one hand, the bank gave with the other, cutting its three-year fixed rate by 15bps to 5.99%.


  • by Scott B 10/02/2012 2:49:44 PM

    It is now time for the other lenders to define the word competition and be competitive not follow the majors but become a major lender themselves.

  • by Wes 10/02/2012 2:50:13 PM

    Giving and taking with the recent 90bps to 100bps offers which slightly undercut others on price now taken back. Not a great PR exercise to the customers who selected or refinced to ANZ in the last 6 months of the specials.

  • by John 10/02/2012 3:09:55 PM

    This adds what $180pa to the cost of a $300,000 loan.
    Not too much to get overexcited about.
    ANZ has not made the sky fall in after all.