Westpac's Kelly tips more rate pain ahead

by Adam Smith08 Mar 2012

Westpac boss Gail Kelly has warned consumers they could get slugged with more frequent rate hikes.

Kelly told the Australian Financial Review that borrowers should expect "smaller rate moves more often" as banks continue to distance themselves from the RBA.

Kelly claimed that funding costs remained expensive, and pointed to analysis indicating banks would have to hike rates by 15-20bps to remain profitable.

The claims echo those of CBA boss Ian Narev, who recently claimed the bank had just crossed the line into profitability on home loans after its 10bp February rate hike.

ANZ is set to announce its rate decision tomorrow, and HSBC economist Paul Bloxham has warned the AFR that consumers could be hit with more increases.

"We could see further tightening from the banks independent of the RBA," he said.

Related stories:

CBA loans 'just crossed' profitability line with hike

Bank funding cost claims 'mathematically impossible'


  • by Country Broker 8/03/2012 9:46:17 AM

    Seems like some and mirrors to me , particulary in view of some the articles published by theaustralian managers of overs seas banks

  • by JERRY gIBB 8/03/2012 10:44:35 AM

    Stop ripping the consumer of. Government get off your lazy backside. They are greddy and all they care about is the CEO paypacket and the shareholder. Customers time to wake up as they do not "live in your world" to use the phrase of one of the big 4

  • by Broker - 14 Years 8/03/2012 11:07:45 AM

    Will the Banks be just as quick to lower interest rates when the costs of funds reduce ... I think not !!!
    Thank goodness the smaller Banks / Lenders are providing strong competition for the major banks otherwise our clients would be forced to pay much more.