Banks risk backlash on rates delay

The big four commercial banks in Australia are estimated to receive an additional A$5.6 million in profit for each day where they delay the passing on of interest rate cuts to borrowers, according to an industry estimate.

Some argue that this A$5 million per day gain could be passed on to retailers that were hurting significantly due to low spending over the Christmas period.

ANZ Bank passed its rate cut on first, trimming its borrowing rates by the full 25 basis points at 12:30pm on the Thursday after the Tuesday 6th December announcement. NAB did likewise later that afternoon.

A number of factors caused this delay, with the main rationale cited being the time taken to consider the cost of sourcing funds from overseas.

Source: SMH