The National Australia Bank raised its business lending loans rate by 20 basis points yesterday but the other major lenders are reluctant to reveal whether they will also bump up loan rates.
NAB’s increase in the ”liquidity premium” for mid to large-sized businesses is its second such increase this year.
A spokeswoman for NAB played down the impact of the increase to SmartCompany.
“The liquidity margin applies to some market-linked products primarily for mid to large businesses that want to access funds for short periods of time,” she says.
“The vast majority of small business customers will not be impacted as they largely use variable rate lending products.”
The spokeswoman says “strong competition” for deposits put the interest paid to term deposit customers at an “all-time high” relative to the Reserve Bank cash rate, and wholesale funding costs remain elevated.
The spokeswoman hit back at suggestions that business customers are subsidising NAB’s push into mortgages.
“The two are not linked,” she says.
Joseph Healy, group executive of NAB business banking, said: “NAB is committed to being transparent about our funding costs and explaining the portion of our customer’s total rate that is attributed to cost of funds”
The other major lenders were unwilling to reveal whether they would also raise their business loan rates.
Commonwealth Bank spokeswoman Tracy Hicks told SmartCompany the bank’s rates were “regularly under review” but would not reveal when the next business loan review would occur.
“We don’t commit to dates,” Hicks says.
ANZ spokesman Stephen Ries told SmartCompany the bank “didn’t speculate on interest rates” and says the bank reviews small business loans on the second Friday of every month.