Westpac's Promises

Westpac has come out and said that they are not apologising to anyone for their rate hike last week.

Westpac's CEO Gail Kelly has promised that none of Westpac's customers would lose their homes because of the rate rise.

Westpac - not a price leading bank

Westpac raised their standard variable mortgage rate by 45 basis points - which is almost double the increase in official rates.

Westpac's CEO stated the reason behind their decision to hike their standard variable mortgage rate to 6.76 per cent was because of the cost of securing term funding from offshore wholesale markets.

Yet Commonwealth Bank and ANZ Bank only raised their rates by 37 basis points and 35 basis points respectively. The National Australia Bank's rate rise was the same as the RBA's 25 basis points.

Outgoing group executive for Westpac's retail and business banking Peter Hanlon told analysts that Westpac did not have a price leading strategy.

Mrs Kelly stated that all customers would have to pay more to borrow.

Mr. Hanlon pointed out that although Westpac had a standard variable rate that was around 17 basis points higher than its big four rivals, their customer numbers and increased market share had doubled the average rate of its competitors over the past 12 months.

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Published on December 12-th, 2009 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.
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