Unacceptable bank delays

Date: 03 September 2008

It is not good enough for some of the largest commercial banks to take almost a week before passing on Tuesday's cut in official interest rates to their customers, unions say.

Every day the major banks delay cutting their rates costs Australian home buyers another $2 million.

ACTU President Sharan Burrow said banks have inflicted financial hardship on Australian borrowers by hiking their lending rates four times this year independently of the Reserve.

So they should not delay in reducing some of the pressure by lowering their variable rates immediately.

"The big banks are quick to pass on rate increases but slow to cut them," Ms Burrow said.

"Today's 0.25 of a percentage point cut in the official cash rate has been well-telegraphed by the Reserve Bank and there is simply no excuse for the commercial banks to not immediately reduce their lending rates.

"It is not acceptable for the Commonwealth Bank, ANZ and Bendigo Bank to wait until next Monday to lower their mortgage rates."

St George Bank has been the worst -- waiting for almost a month until September 29 before it will cut its variable rate by a welcome 0.3 of a percentage point.

Ms Burrow said the commercial banks had hiked interest rates four times this year outside of movements in the official rate, adding an extra $100 a fortnight to typical mortgage costs.

With the banking sector still extracting wide profit margins, they should move further than the Reserve's decision today.

"Having increased their own rates well above the official rate this year, the banks must now move further than the Reserve Bank on the way down," Ms Burrow said.

For further information

Contact:	Mark Phillips
Union:	ACTU
Phone:	03 8676 7266
WWW:	http://www.actu.asn.au/

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