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... As second tiers follow suit

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Australian Broker | 12 Jun 2012, 05:00 AM Agree 0
Second tiers have followed on the rate cuts flowing through from the major banks
  • Stephen Dinte | 12 Jun 2012, 10:31 AM Agree 0
    It is important to look at the real effect of a lender's action in respect to a RBA rate cut. Most analysts merely reflect on the actual reduction, rather then what it means. The RBA cuts the cash rate by 25 bps. A lender then cuts it's SVR by 20 bps. What this really means is that the lender has only passed on 80% of the cut, and improved it's profit position by 20%. That is a massive improvement to the bottom line. I only wish I had the same power to magically increase my bottom line by 20%.
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