CBA, ANZ, St George lift interest rates

Two of Australia's biggest banks have announced 25 basis point interest rate
increases on home loans, moving in lock-step with the Reserve Bank of Australia's
(RBA) rate hike.
Commonwealth Bank (CBA) will raise its interest rates on standard variable loans to
6.86 per cent on March 5 and ANZ Banking Group Ltd will increase on the same day to
6.91 per cent.
The announcements came after the RBA raised the official cash rate by 25 basis
points to 4.00 per cent on Tuesday - the highest level in a year.
Three of the big four banks copped a public backlash in December for imposing bigger
interest rate rises than those of the RBA, especially Westpac Banking Corporation.
Westpac subsidiary St George Bank also matched the RBA rise on Tuesday by lifting
its variable rate by 25 basis points to 6.93 per cent from March 5.
Interest rates on some savings accounts will also rise, the banks said in separate
statements on Tuesday.
CBA attributed the rate hike to "recent increases in market interest rates and
wholesale funding costs."
ANZ's chief of Australian operations, Phil Chronican, said funding costs to the bank
remain high, but it will continue to absorb some of the additional funding costs out
of concern for the impact on the wider community.
Higher funding costs look to be a permanent part of the global financial landscape,
he added.
Interest rates for business lending and credit cards remain under review, ANZ said.
The banks' decision to move in lock-step with the RBA's interest rate rise comes
after rival Westpac created a public furore before Christmas because of the
magnitude of its out-of-cycle rate rise.
Westpac came under fire in December for raising its standard variable rate by 45
basis points, 20 basis points more than the RBA's hike that month.
Other banks also increased more than the RBA in December, with CBA raising by 37
basis points and ANZ by 35 basis points.
National Australia Bank (NAB), which is yet to announce a decision this month,
raised its variable rate by 25 basis points in December.
RBA governor Glenn Stevens on Tuesday noted the RBA's three consecutive interest
rate rises in late 2009 had resulted in lenders generally raising rates "a little
more" than the cash rate.
"Most loan rates rose by close to a percentage point," he said in a statement.
The SVR on home loans offered by the big four banks now stands at 6.91 per cent at
ANZ, 6.86 per cent at CBA, 6.76 per cent at Westpac, and 6.49 per cent at NAB.