Australia and New Zealand Banking Group Ltd. cut its benchmark mortgage rate by 27 basis points, the first time one of the nation’s four major lenders passed on more than the central bank’s reduction since October 2008.
ANZ reduced its standard variable mortgage rate to 6.13 percent, matching National Australia Bank Ltd. (NAB)’s rate as the lowest among the country’s four biggest banks. NAB, Commonwealth Bank of Australia and Westpac Banking Corp. (WBC) matched the 25 basis-point rate reduction by the central bank, which dropped rates to a record low of 2.75 percent on May 7.
Until this week, Australia’s top four lenders hadn’t passed on in full the central bank’s rate cuts, which began in November 2011, citing higher funding costs and competition for deposits. Funding costs have since eased with the yield premium on bank bonds over government debt at the lowest since November 2007, Bank of America Merrill Lynch data show, sending home lending rates to their lowest since 2009.
“This month we reviewed a range of factors including the Reserve Bank’s decision to decrease the official cash rate this week, our competitive position and a recent easing in the cost of our wholesale funds,” ANZ CEO Australia Philip Chronican said in a statement. “While competition for deposits remains strong, our overall funding cost position has allowed us to reduce variable mortgage rates” by 27 basis points.
ANZ last lowered its home lending rate by more than the RBA in October 2008 when the central bank reduced its cash rate by 100 basis points and the lender followed with a mortgage rate drop of 105 basis points in two steps. CBA in the same month cut rates by 101 basis points in two steps.
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