| 03.05,12. 11:49 AM |
CBA cuts standard rate but not in full
May 03, 2012
MAJOR lender Commonwealth Bank has cut its standard variable rate by 0.4per cent today, becoming the second lender to fail to pass on the Reserve Bank's interest rate cut in full.
CBA today announced it will reduce interest rates on its range of variable home loan accounts by 0.40 per cent per cent, effective from next Friday.
In a statement accompanyijg the announcement, the bank said: "In making this decision, the Group has continued to balance the interests of its 1.8 million home loan borrowers with those of its 11 million depositors, and those of its shareholders, who include 800,000 Australians who own its shares directly, and millions more Australians who own shares through pension funds."
The move will draw the ire of mortgage holders around the country, who have now seen both NAB and CBA hold back from passing on the Reserve Bank's full 50 point cut on Tuesday.
The Daily Telegraph today revealed NAB will save $27 a month for the 18 basis points they failed to pass on to customers.
Meanwhile, Westpac has today posted a bumper $3.195 billion profit, mounting pressure on the lender to pass on the Reserve Bank's 50 basis point cut in full.
Westpac CEO Gail Kelly this morning said: “This is a sound result in a challenging environment and reflects continued progress in building a stronger and more productive organisation."
National Australia Bank last night became the first to break free from the Mexican stand-off with the other big banks, agreeing to pass on a rate cut to its customers - but not by the full 50 basis points.
NAB group executive Lisa Gray justified NAB's move by saying it still offered the lowest standard variable of the majors.
"The European debt crisis is having an impact on the global and domestic economy," Ms Gray said.
"By maintaining the lowest standard variable rate of the major banks, we have sought to continue to shield our customers from current global economic instability."