Westpac has delayed adjustment to home loan repayments, after last year's rate cuts, by several months.Westpac's November rate cut was effective on November 14 and its December rate cut on December 19. However, the bank wrote to customers telling them their monthly repayments would not be adjusted until March.To start making the lower repayment earlier customers have to contact the bank and request a payment variation.Source: Sydney Morning Herald
Banks want new tax breaks on savings accounts to give them access to cheaper money.Suncorp Bank chief executive David Foster, Westpac deputy chairman John Curtis and ANZ chairman John Morschel said tax incentives to encourage deposits would help banks further reduce their reliance on volatile offshore markets.Suncorp's Mr Foster said there was a need for further incentives to encourage savings in deposits. “The thing that is going to drive the ability of banks to sustain customers is the ability to have sustainable and affordable funding,” he said. “It's the ongoing challenge for the industry.”Source: The Australian
The big banks will only pass on about half of any cut to the official interest rate next week, according to leading economists.Aussie Home Loans founder John Symond believes that if the central bank cuts the cash rate by 25 basis points to 4 per cent, banks will pass on just 15 basis points as they move to prop up their profit margins.“Politicians will come out with lots of rhetoric, but it is pretty obvious to the money markets and the RBA that the banks have no other option but to withhold some of any rate cut,” Mr Symond said.Source: Herald Sun
The big banks are signalling they will not pass on all of the Reserve Bank's expected interest rate cut next week.ANZ is due to hold its monthly review of lending rates next Friday, after the RBA's decision on Tuesday. There is speculation that Westpac, the Commonwealth Bank and NAB could delay announcing their interest rate decisions until ANZ makes its move.Most analysts believe the four banks could pass on 20 basis points of the expected 25-basis-point RBA cut to offset the higher funding costs.Source: The Australian
The ANZ Platinum Visa credit card is offering an annual fee waiver. Your first annual account fee of $87 is waived and your next annual account fee won't be charged at all if you've made at least $20,000 in eligible purchases using your ANZ Platinum card, in the year prior to your next fee date.The card also offers Flexible payment options for travel-related purchases of $500 AUD or more and Overseas Travel and Medical Insurance. Other insurance included on the card are ANZ Car Rental Cover, 90-day Purchase Security Insurance, Extended Warranty, Interstate Flight Inconvenience Insurance.The card features a current interest rate on purchases of 19.24 per cent after a 55 day interest free period and 20.99 per cent on cash advances.Source: ANZ Bank
The opening of Bank of Melbourne’s Balwyn branch on February 27 will be the Westpac subsidiary’s fiftieth branch opening in six months.Since the relaunch of the BOM brand in July last year, 34 St George branches have been converted to BOM and the rest have been new sites.The bank said customer acquisition in Victoria had doubled since the change.Source: Banking Day
Mortgage broker AFG's NSW/ACT state manager Chris Slater said the banks have gone to great lengths to forewarn borrowers and brokers that any rate cuts delivered by the RBA may be withheld.ANZ's chief executive Australia Phil Chronican said the bank's funding costs were now “largely unrelated” to movements in the official cash rate and the bank now reviews its rates on the second Friday of each month – independently of the RBA.Westpac's chief executive Gail Kelly told press that the lender had decided to follow ANZ's suit and review its mortgage rates independently of the Reserve Bank.RP Data's senior research analyst Cameron Kusher said if the banks withhold some or all of the rate cut, it would really hurt the level of housing activity.Source: The Adviser
Defence Force Credit Union announced yesterday that it had Australian Prudential Regulation Authority approval to change its name to Defence Bank.Defcredit's move follows similar moves by bankmecu, QT Mutual Bank and Heritage Bank. Teachers Credit Union is going through the APRA approval process and expects to become Teachers Mutual Bank in April.Defence Bank chief executive Jon Linehan said the credit union had not been required to make any changes to its financial structure to gain APRA approval.Linehan said he expected industry consolidation would result in the formation of 10 to 12 large mutual banks. These would form the banking industry’s “fifth pillar”.Source: Banking Day
Term deposit interest rates have been on the slide for the past six months on expectations of lower interest rates.Investors looking for a safe place to park their cash may want to move quickly and lock in higher rates before more expected rate cuts in coming months.For a $50,000 term deposit, UBank’s interest rate of 6.11 per cent is the most competitive over six months. Investec Bank Australia has the best rate of 6 per cent for a three-month term. For three years, the 6 per cent offer from the Arab Bank Australia is best.Source: The Age
Shadow treasurer, Joe Hockey, says the Reserve Bank of Australia should ‘referee’ bank interest rates because it is best placed to judge whether passing on reductions was affordable.“I would like to see the RBA take on a greater role as a referee and in their statement include whether the banks should pass [rate cuts] on in full or in part,” he said.Competition had to be respected so the Reserve Bank's views would not be binding, he said. But it would be independent and allow public debate about rate cuts to be factually based.Source: The Age
The Treasurer, Wayne Swan, gave notice yesterday that he would be pushing the banks to pass on any rate cut granted next week.“I won't be pulling back from my discussion about the important issues associated with interest rate cuts; I will be making frank and fearless comments about that,” Mr Swan said. “We have very highly profitable banks in this country. Their return on equity is unequalled in the world.”When the Reserve Bank last cut rates, before Christmas, the banks passed the reduction on only after several days of public exchanges with the government. They made it clear then that future rate reductions early this year were unlikely to be passed on in full, if at all.Source: Sydney Morning Herald
Westpac could be the first big bank to raise interest rates independently of the RBA because of its large residential mortgage portfolio.Westpac appears to be in the most likely position to move its interest rates out of cycle said Credit Suisse analyst Jarrod Martin.“Westpac to us is the natural price leader despite having a relatively cheap flagship standard variable rate, with funding cost pressures that will increase the need for an industry repricing, in our view.”Source: The Australian
Credit card interest rates remain stuck at high levels and relief is unlikely even if the Reserve Bank of Australia announces an official rate cut next week.In the past five years, the RBA official interest rate has dropped 2 per cent while average credit card interest rates have jumped more than 2 per cent for both regular and low-rate cards.Australian Bankers' Association chief executive Steven Munchenberg says credit card interest rates are driven by three main things: competitive pricing, how much it costs the lender and a risk element.“As a result of the global financial crisis, banks have tended to reprice risk,” he says. “Credit card lending is high-risk lending, particularly compared with mortgages.”Source: The Daily Telegraph
Savers are being lured by special offers and incentives by online savings accounts but there can be conditions attached.UBank's USaver offers 6.01 per cent if the account holder sets up an automatic savings plan of $200 a month. The base rate is currently 5.41 per cent. ING Direct, RaboDirect and Virgin Money also offer very good interest rates to savers.UBank's general manager Alex Twigg says anybody can open an online savings account in just ten minutes. “They can have an account number and passed their 100-point check without providing any documentation.”He says despite it all being online, it doesn't leave out the elderly, with customers ranging in age from 18 to 108.Source: Courier Mail
NAB’s UBank and other online banking operations such as ING Direct, are examples of the future of banking, where customers can access their accounts from anywhere, including on their mobile phone according to McKinsey’s annual review of the banking industry.Internet banking is now responsible for almost two billion transactions a year, while the number performed in bank branches has steadily declined. Banking on mobile phones is still very much in its infancy.The rise of online banking has encouraged “rate hounds” - people who are prepared to move their money around to chase higher interest rates.So while Australians are saving rather than borrowing, they are also more demanding of their savings accounts.Source: The Australian
The frequency of non-cash payments increased by eight per cent last year, according to the Bankwest Cash Report.The fastest growth of any transaction type was the use of debit cards for small transactions, up 14 per cent in 2011.Cash accounted for 62 per cent of household payments. Over the past 12 months, cash in circulation rose by seven per cent and the number of credit card transactions increased by six per cent partly as a result of more online purchasing.Credit cards are the most popular payment type for online purchases, accounting for 61 per cent of online purchases. Online payments now account for 17 per cent of non-cash retail payments.Source: Banking Day