ANZ has buckled and followed the Commonwealth Bank eight days later in lifting its standard variable mortgage rate by more than the Reserve Bank’s 0.25% rate rise on Melbourne Cup Day.
The ANZ went up 0.39%, or 39 basis points, 0.06% under the Commonwealth’s increase, according to a statement late yesterday.
The ANZ however is also abolishing its mortgage exit fee.
ANZ’s standard variable rate will rise to 7.80% per annum from Monday, just below the Commonwealth rate of 7.81%.
Those rates do not apply: official figures show the average discount from the standard rate is 0.65%.
ANZ offered some sweeteners in an attempt to mollify customers, politicians and regulators.
"Providing up to $1,600 in fee discounts and subsidies until the end of 2010 to reduce ‘switching costs’ for new and existing customers, including:
- "Waiving ANZ’s Loan Approval Fee of up to $600 for all new and existing mortgage customers applying for ANZ’s discounted 3-year fixed rate offer.
- "Providing a subsidy of up to $1,000 to offset switching costs charged by other institutions for new mortgage customers applying for ANZ’s discounted 3-year fixed rate offer."
ANZ also announced changes to deposit rates with ANZ’s Premium Cash Management Account up 0.25%pa and ANZ Progress Saver Account having increased 0.75%pa in recent weeks. Interest rates for credit cards will increase by 0.25%pa.
Interest rates for business lending will increase by 0.39% a year as well.
It says it will abolish its deferred establishment fee (the mortgage exit fee) as dropping fees for customers switching to a special three-year fixed loan it is offering.
ANZ is also cutting its three-year fixed home loan rate by 44 basis points (0.44%) to 7.1% a year until the end of December.
Spokesman Paul Edwards says the bank will not try to recover its costs in other areas and that they will be absorbed by the bottom line.
ANZ shares eased 5c yesterday to $23.70 on a day when the wider market fell for a third day, losing almost 1% in value.
The ANZ’s move came as Australian banks look like they will escape the full weight of the new, stringent global capital and liquidity rules.
The win means that the already strong Australian rules on issues like capital and liquidity will apply. In many cases these are as stringent, if not more so than the proposed global rules.
Following a meeting of central banks in Basel Switzerland last weekend, there’s news of a radical change in the approach to bank regulation to be put to the Group of 20 leaders meeting in Seoul, South Korea, from today.
From a report in the Financial Times overnight:
"Most big Asian banks will be exempted from a global regulatory regime under the latest proposal for the industry from the world’s leading economies, which aims to prevent another financial crisis.
"People briefed on the agenda for the G20 summit, which begins in Seoul on Thursday, said officials had concluded that global regulators should focus on big banks with global businesses, stripping out domestically focused institutions without the reach of the industry’s cross-border companies.
"According to these criteria, many big lenders in countries such as Japan and China, with a limited presence abroad, will be exempted, leaving domestic regulators to deal with them as they see fit. But in a move that will disappoint some, the G20 is set to defer a decision on whether there should be a globally set capital surcharge for systemically important banks.
"It will also delegate much of the work needed to deal with threats to the financial system to national regulators.
"Nonetheless, the G20 will press ahead with the creation of two separate systemic bank lists, the first with an estimated 20 global banks whose failure would pose a risk to the international financial system. The second would be a country-by-country list of banks that are systemically important within their home economies, but pose little danger to the world."
Australian banks which, with the small exception of their links to New Zealand, do not have significant international reach and are overwhelmingly concentrated on the domestic Australian market.
This is a victory for APRA and the RBA, which have pushed the line that the proposed rules on banks should not apply in full to Australian banks which were heavily regulated before the GFC in many of the areas that brought the financial systems of the US, Europe, the UK and indeed much of the developed world to near collapse.
In fact as late as last week APRA made it clear in its 2010 annual report that it would not wear the harsher rules that were revealed mid-year.
APRA said that "The tougher approach to capital quality is unlikely to have significant implications for ADIs in Australia". (ADIs are Authorised Deposit Taking Institutions, all 182 of them at June
