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Date Published : Monday, January 14, 2008
Another of Australia's largest financial institutions has moved away from the Reserve Bank and increased the interest rates it charges on its home loans.
St George Bank has announced that it will increase the rates on variable rate home loans by 0.2 per cent to 8.77 per cent, effective from January 15th.
The bank claims the impact of the US sub-prime lending crisis and the global credit crunch has meant that it has had to find extra money from customers.
St George follows in the footsteps of a number of Australian banks, which have moved away from the interest rates set by the Reserve Bank of Australia for the first time in over a decade. Commonwealth Bank, National Australia Bank and ANZ have all increased the rates of interest they charge on variable home loans since the start of the month.
Michael Cameron, chief financial officer at St George, said: "Over the past five months we have been absorbing increased funding costs of more than 0.3 per cent and have hoped that conditions would soon return to normal and we would not have to pass these costs on to our customers.
"However, as this situation has continued, the bank has now changed its interest rates to take into account these increased costs."
Earlier this month, amid reports that the Reserve is set to increase its own interest rates, treasurer Wayne Swan said banks should remember their customers, especially young families, when considering future rate increases.
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