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Who believes the big banks spin doctors?

Posted by Paul Ryan on 08-March-2012, 01:51 PM

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Last week’s intouch TV: Don’t fall for the big banks crying poor” continues to ring true as it comes to light that the big banks have experienced substantial reductions in their cost of funding over the past month.

Leading economists have reported a reduction of up to 0.50% in the banks cost of funding yet it was the higher cost of funding touted as the reason why they increased interest rates out of cycle In February as well as highlight the need for dramatic job cuts.

Now today we receive the news from Westpac CEO Gail Kelly warning consumers to expect more pain in rate movements as she expects “smaller rate moves more often.”

So with record profits been splashed all over the financial papers it becomes a bitter pill to swallow when we understand an increase in rates by 0.10% will deliver a further estimated quarter of billion dollars in profits for Westpac alone.

The big question that needs to be asked is why are the banks PR spin doctors so quite given the lower cost of funding and their enhanced ability to provide customers a break by reducing home loan rates.

I wonder if Gail Kelly statement of “smaller rate moves more often” means they will lower rates out of cycle with the RBA. Now that would be giving something back to the community.

 

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