The ANZ bank is the first of the big four banks to raise its interest rate by 6 basis points to 7.36 per cent despite the Reserve Bank's decision to leave the cash rate on hold at 4.25 per cent.
Mr Swan stated that Australian major banks were very profitable, and that their net interest margins were back to where they were prior to the global financial crisis. Mr. Swan made mention of the fact that since changes had been made by the Government, it had become easier for customers to "walk down the road and get a better deal."
Shadow Treasurer Joe Hockey stated that since the ANZ had defied Mr. Swan's warnings he had "lost control of the economy". He further went on to say that it would be a waste of time for customers to walk down the road for a better deal as they will most likely be lifting their rates shortly as well.
ANZ also announced that its three year fixed rate home loan rate will fall by 0.15 per cent to 5.99 per cent.
Phillip Chronican chief executive of ANZ stated that the reason behind the ANZ rate rise was due because of intense pressure on retail and business banking margins.
ANZ rate rise will add $6.50 per fortnight to the average home loan of $280,000.
ANZ spokesman added that 85 per cent of their customers were already ahead on their repayments, meaning that they will not need to pay more as a result of the rate rise.
Update: Westpac Bank has become the second of the four big banks to raise interest rates in defiance of the Reserve Bank of Australia (RBA). Westpac announced that it would raise its standard variable home loan rate by 0.10 percentage points to 7.46 per cent, effective from February 20.