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Bank of Queensland Boosts Mortgage Rate on ‘Fierce’ Competition

March 6 (Bloomberg) -- Bank of Queensland Ltd. will increase its standard variable home loan rate by 10 basis points to 7.46 percent in response to “fierce” competition for deposits and higher funding costs.

“BOQ has covered the higher cost of funding for a number of months to provide our lending customers with certainty, and it is disappointing that we’re unable to continue on that course,” Stuart Grimshaw, chief executive officer of the Brisbane-based bank, said in an e-mailed statement today.

The move came hours after Australia’s central bank left the overnight cash-rate target at 4.25 percent, the second pause after two reductions late last year. Larger Australian lenders including Australia & New Zealand Banking Group Ltd. and Westpac Banking Corp. increased variable interest rates for mortgages last month, weakening the link to central bank moves.

Bank of Queensland declined 0.1 percent to A$7.45. The benchmark S&P/ASX 200 fell 1.4 percent.

The new rate will take effect March 16, according to the statement.

To contact the reporter on this story: Jacob Greber in Sydney at jgreber@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

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