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ANZ lifts home loan and small business interest rates; Guaranteed to kill the housing market
Topic Started: 13 Apr 2012, 07:13 PM (1,571 Views)
Rastus2
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Lefty
14 Apr 2012, 09:01 AM
If banks are truly determined to ignore the RBA from now on and act on their own accord, then the effectiveness of monetary policy is diminished.

I see that CJ felt the need to emphasize that he had already predicted this. :oo:
Stop picking on cj,

If you go back and read you would know he did indeed predict this rise...(aswell as a fall)..

The man is a genius, just ask him... FIGJAM. :lol
Shadow - Defrauded his Bank ? 2015 I have 9 different loans and my bank had no idea which ones were personal and which were investment. They had half of them classed incorrectly. When this change came in they asked me to tell them if any personal loans were incorrectly classed as investment, which I did, and they switched them to personal for the lower rate. They also had a couple of investment loans incorrectly classed as personal. They didn't ask me about those. So they stay on the lower rate too. Worked out pretty well. :)
Shadow - 2008 Sydney Median House Price 1.25M by 2014-2015

Shadow : I think this boom has already begun in several cities. My prediction :
Peak of boom: 2014-2015. Sydney Median Price: $1,250,000 Bottom of bust: 2017-2018. Sydney Median Price: $1,100,000

Shadow's Original 2010 House Boom and Crash prediction http://s836.photobucket.com/user/rastus22/media/shady-orig-2010-chart.png.html?sort=3&o=0

Shadow's attempt to edit his 2010 chart in 2015 and replace it with one that does not show a crash in 2013 http://s836.photobucket.com/user/rastus22/media/Screen%20Shot%202015-06-06%20at%207.12.52%20pm_1.png.html
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earthsta
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Mr Wu
14 Apr 2012, 07:42 AM
CapedCrusader
13 Apr 2012, 07:13 PM
ANZ BANK has lifted interest rates for its variable home loan customers and small business borrowers despite the central bank leaving the cash rate on hold.
ANZ announced it was increasing variable rate mortgages and small business loans by 0.06 per cent.


Wu say this make $300,000 loan rise by less than cup of coffe / week and you say thiss garantee to kill house?
Wu say you the big laugh :lol
Earthsta say ANZ continue liftig rates like this that equate to just under 1% in a year. Earthsta say WU Smu not be able to afford repayment on pagoda and be evicted by shaolin sheriff
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Revealed: why the big banks lifted interest rates

Sean Aylmer
April 23, 2012

ANZ BANKING GROUP is set to reveal reduced margins at its six-monthly profit announcement next week, after providing an unprecedented look into the financials behind its earnings in the mortgage market.

In a letter to the Herald, the chief executive of ANZ Australia, Philip Chronican, said the cost of raising money to lend to customers had risen and, for the first time for a major bank, provided detailed figures to back up his argument.

''The bottom line is that, taking into account ANZ's funding mix of deposits and short- and long-term wholesale funding, our funding costs are up 18 basis points over the past six months while ANZ's variable interest rates have risen by 12 basis points,'' he said.

The letter from Mr Chronican effectively admits that the net interest margin for the bank - the difference between the cost of borrowing money and lending it - has been reduced. The net interest margin underpins bank profitability.

''In the six-month period from 1 October 2011 to 31 March 2012, the average cost of ANZ's $75 billion stock of term wholesale funding increased every month, except in December 2011, when credit markets froze because of the European sovereign debt crisis and wholesale markets were closed globally,'' he said.

In terms of wholesale markets, less expensive funding which cost on average 72 basis points above the three-month bank bill swap rate - the benchmark for interest costs - was replaced by funding, on average, 165 basis points above the swap rate.

''ANZ's average cost for term wholesale funding increased by 15 basis points from 116 basis points above the … swap rate to 131 basis points,'' Mr Chronican said.

In terms of funding from bank deposits, the difference between the Reserve's overnight cash rate and the average amount that ANZ pays to depositors has increased by 28 basis points, from 0.41 per cent to 0.69 per cent.

The big four compete aggressively and any squeeze on one lender would be mirrored by the other three.

Read more: http://www.smh.com.au/business/revealed-why-the-big-banks-lifted-interest-rates-20120422-1xf79.html#ixzz1soaPWcoI
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ANZ chief denies claims of gouging on rates

Peter Martin
April 23, 2012

THE ANZ has hit back at claims it is gouging by lifting mortgage rates independently of the Reserve Bank, saying its monthly adjustments are to recover costs and not to widen margins.

In an article published in the Herald today, the chief executive of ANZ Australia, Philip Chronican, says the bank's wholesale funding costs increased in all but one of the past six months.

"As less expensive funding (costing on average 72 basis points above the three-month bank bill swap rate) matured and was replaced with more expensive funding (on average 165 basis points above) reflecting the current conditions in global markets, ANZ's average cost for term wholesale funding increased by 15 basis points," Mr Chronican says.

The relative cost of deposits climbed even more as the gap between the Reserve Bank cash rate and the average amount the ANZ paid depositors climbed by 28 points.

A spokesman for the Treasurer, Wayne Swan, was unimpressed, pointing to this month's Reserve Bank board minutes that said wholesale funding costs had eased in recent months.

Speaking to the ABC from Washington, where he has been attending a G20 finance ministers' meeting, Mr Swan referred to the "debacle" of the Coalition defending the ANZ rate rise.

Read more: http://www.smh.com.au/business/anz-chief-denies-claims-of-gouging-on-rates-20120422-1xf4j.html#ixzz1soadx1Jh
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Facts and integrity behind rates move

Philip Chronican
April 23, 2012

The decision by ANZ Bank to set variable interest rates for mortgage and small business lending on a monthly basis has sparked a great deal of debate. At a time when many people are feeling uncertain about the global economy and their future, these views are understandable and they reinforce the significant responsibilities banks have when making commercial decisions.

While nothing is likely to remove the anger many feel about interest rate decisions, banks such as ANZ are serious-minded institutions and they make decisions based on a strong factual basis. It is not possible to be in business for 177 years, serve 8 million customers and provide almost $600 billion in lending if you are not.

In recent days, some people have publicly raised questions about whether ANZ could justify the increase in mortgage and small business lending rates of 6 basis points (0.06 per cent) announced on April 13.

Much has been made of comments by the Reserve Bank of Australia on bank funding costs in the minutes of its April monetary policy meeting. The comments have been used selectively and ANZ's integrity has been called into question.

Banks raise funds to lend to customers from two main sources - from customer deposits and in wholesale markets from domestic and international investors.

In the six-month period from October 1 to March 31, the average cost of ANZ's $75 billion stock of term wholesale funding increased every month, except in December, when credit markets froze because of the European sovereign debt crisis and wholesale markets were closed globally.

Less expensive funding (costing, on average, 72 basis points above the three-month bank bill swap rate) matured and was replaced with more expensive funding (on average, 165 basis points above), reflecting the current conditions in global markets.

As this happened, ANZ's average cost for term wholesale funding increased by 15 basis points from 116 basis points above the three-month bank bill swap rate to 131 basis points above it.

We accept that for most people this sounds complex; however, we believe it is important that we are transparent on these additional costs. The Reserve Bank highlighted its understanding of the situation on April 17 when it said: "Corporate bond spreads had narrowed further and were now significantly lower than at the beginning of the year, though still higher than in the middle of 2011, particularly for banks."

While much is made of wholesale funding, the primary source of lending is customer deposits. Announcing the outcome of our monthly interest rate review in April, ANZ said that: "Increased competition for deposits, particularly term deposits, is currently the most significant driver of rising funding costs."

Read more: http://www.smh.com.au/opinion/society-and-culture/facts-and-integrity-behind-rates-move-20120422-1xeys.html#ixzz1soaxHDKL
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Time for banks to take one for the team

April 27, 2012

The contrast could not be more stark; as the Reserve Bank prepares to cut interest rates next week to kickstart a rapidly cooling economy, the big banks will be getting ready to again announce record billion-dollar profits.

Talk is already turning to how much of the RBA rate cut the big banks will pass on to mortgage holders.

Make no mistake: profits are a good thing. And Australia does need a strong and healthy banking system. But there's a mounting argument that banks too should play their part in helping restart the economy. And they should start by passing on next Tuesday's rate cut in full.

In a world of post-financial crisis belt tightening, the banks appear to be the only ones jollying along as if nothing has changed.

What has changed, however, is their market power, which is now stronger than ever.

While it is clear the RBA is having a hard time juggling the competing inflationary forces of a mining boom west of the Nullarbor with the recessionary funk on the east coast, the banks are behaving as if they are determined to maintain their profit trajectory.

Other sectors such as retail and service industries have argued for months that they need the stimulus of a rate cut to get consumers spending.

Even miners, in the middle of a once-in-a-lifetime boom, are pulling their heads in. China is cooling. Commodity prices are falling. A fall in coal prices has seen expectations of investment in mining ease.

Belts are being tightened everywhere. Households are paying off debt. Companies are trying to cut costs wherever they can.

From the behaviour of the banks, however, it appears they believe banking profits are sacred. Any criticism is met with the response about ''the need for a healthy banking system'' and their need to pass on their higher cost of funding.

Read more: http://www.smh.com.au/opinion/society-and-culture/time-for-banks-to-take-one-for-the-team-20120426-1xnv2.html#ixzz1tBgfbh1v
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