The Reserve Bank may have cut interest rates by 25 basis points to 3.25% last week, but only two of the big four banks passed the rate cut on in full to business.
Making the rate cut, Reserve Bank governor Glenn Stevens said the banks’ recent decisions to move outside of the Reserve Bank’s range had played a role in cash rate decisions.
“We never know in any month exactly how the banks will respond. But we have a decision time each month where we can learn from what they’ve done and make any further adjustment as needed,” he said.
“It’s a matter of us trying to calibrate our instrument to get the right ultimate result.”
ANZ announced it would lower interest rates for variable rate mortgages and small business lending by 0.25% following its monthly interest rate review.
The bank has maintained its policy of not cutting rates directly following the RBA and instead conducting its own review.
ANZ’s new standard variable mortgage rate is 6.80%. However, ANZ would not provide SmartCompany with details of its business loan rates.
“We don’t have one rate for business customers – they vary depending on individual circumstances,” says ANZ spokesperson Stephen Reis.
Reis says the 0.25% rate cut applies to basically all business loans except those with large corporates.
Westpac reduced interest rates on its standard variable mortgage rate loans by 0.20 percentage points to 6.89% and “certain headline variable loans” for small business were cut by 25 basis points.
“This is the second time in consecutive months that we have reduced the interest rate on certain variable business loans,” said Westpac Group executive in retail and business banking Jason Yetton.
“Despite increased funding costs, we recognise that it is particularly important at this time to help small business in this way, given the critical part this sector plays in supporting the economy and maintaining employment as a whole.”
Westpac did not respond to SmartCompany’s request for information on which business loans have been affected by the reduction and the interest rates on the loans.
NAB reduced its standard variable home loan rate by 0.21% to 6.78% and reduced its standard variable business rate by the same amount.
NAB’s key variable business lending products are the Business Options Prime, which moved from 7.08% to 6.87%, the Business Overdraft Prime which moved from 9.08% to 8.87%, and the Farmers Choice Prime which moved from 8.08% to 7.87%.
“Decisions on lending rates are not taken lightly – we have sought to shield our customers from the full effects of current global economic instability, by maintaining the lowest standard variable home loan rate of the major banks,” said Lisa Gray, group executive in personal banking at NAB.
The Commonwealth Bank Group reduce interest rates on its range of variable home loan accounts by 0.21% to 6.8%.
Steve Batten, spokesperson for the Commonwealth Bank, said the bank’s residentially secured better business loan, residentially secured overdrafts and residentially secured business/agri lines of credit have all been reduced by 0.21% while commercially secured loans remain under review.