Customers don’t like big 4’s post-rate waiting games
Australia’s big four banks have been called out for their “deafening silence” since the latest cash rate decision by the Reserve Bank of Australia (RBA).
Following on from the board’s monthly meeting on Tuesday, 6 September, which saw the central bank raise the cash rate by 50 basis points for the fourth consecutive month — resulting in the current rate of 2.35 per cent, the highest it has reached in seven years.
The lack of instantaneous reaction by Australia’s leading banks is not unusual, especially as the size of the cash rate increased. After the May cash rate decision, three of the big four — CBA, Westpac, and ANZ — announced their decision within hours of the RBA. By August, all four banks waited approximately two days before any movements were made.
According to RateCity, just one lender — Auswide — has taken any action towards implementing the latest cash rate, raising its variable mortgage rate by 0.50 of a percentage point for existing customers and up to 0.40 of a percentage point for new customers from 20 September 2022.
On the savings account front, Ubank has made its plans to pass the full hike on to its customers known, taking the maximum ongoing savings rate to 3.35 per cent from 1 October 2022; however, a decision is yet to be made on its home loan offering.
According to RateCity research director Sally Tindall, “the big four banks are in a staring competition to see who will blink first”, adding that customers aren’t enjoying their games.
“Around three quarters of Australians bank with one of the big four banks, and many of them will be waiting to find out what this means for their home loans and savings accounts,” Ms Tindall said.
She noted how Commonwealth Bank had been the first to announce its decisions after three of the four meetings, including the two most recent ones, while acknowledging Ubank’s swift decision on its saving accounts may spur the big four.
“This will put pressure on some of the other market leaders to put decent hikes on the table for their savings customers,” she said.
Ms Tindall implored: “If you’re fed up with playing the waiting game, pick up the phone to your bank, email or tweet them and ask what they intend to do.”
The RBA’s latest cash rate decision was enacted to continue its mission to stem inflation, with CreditorWatch chief economist Anneke Thompson expecting a pause on cash rate increases could occur as quickly as Christmas as mortgage holders begin to feel “the effects of higher repayments and of course higher prices of everything from furniture, to eating out and to holidays”.
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