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Date Published : Friday, August 22, 2008
ANZ has followed NAB's lead in announcing it will lower its mortgage rates if the Reserve Bank of Australia (RBA) cuts official interest rates next month, it has been reported.
It is widely expected that the RBA will trim 0.25 percentage points from the benchmark rate at its next board meeting on September 2nd and ANZ's rival NAB this week declared it would pass on the rate cut, news.com.au reported.
ANZ chief executive Mike Smith says that it was "unusual to be asked what we are going to do ahead of a rate cut but on what we know today, this is a pretty simple equation".
"If funding costs continue at the current levels and the RBA does actually cut rates, then there will be a full flow on to our mortgage customers," Mr Smith said.
Earlier this week, federal treasurer Wayne Swan said that the original decision by NAB was a "challenge for other banks to follow".
The declaration by ANZ leaves just Westpac and CBA as the two remaining big four banks yet to make a public statement guaranteeing they will pass on any cuts by the central bank.
In related news, ANZ has removed two executives from their positions as a result of its internal investigation into the bank's role in the collapse of stockbroker Opes Prime.
Mr Smith led the investigation and the review found "weaknesses in the management and oversight of the equity finance business" within the securities lending unit of ANZ.
As a result, it was found that ANZ did not adequately identify and manage the range of risks arising from this business.
"There have been no winners from this unfortunate series of events," the chief executive said.
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