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ISCOVER
Jessica Darnbrough
Almost 80 per cent of brokers expect the banks to move out of cycle with the RBA before year’s end.
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According to The Adviser’s latest straw poll, just 15.8 per cent of the 341 respondents think the banks will stay in line with the Reserve Bank.
Broker sentiment seems to echo comments from both Westpac’s chief executive Gail Kelly and CBA’s chief executive Ralph Norris.
Earlier this week, Ms Kelly said higher funding costs would push the bank to move out of the RBA’s shadow, while Mr Norris confirmed yesterday that out of cycle rate rises were “inevitable”.
Speaking at a conference in Sydney yesterday, Mr Norris said there is no doubt, when the bank looks at the current funding costs, rates are going to increase.
"The additional cost of liquidity and the additional cost of capital is going to put upward pressure on interest rates going forward,” Mr Norris said.
But while CBA and Westpac have all but guaranteed they will lift rates independent of the Reserve Bank, it seems not all of Australia’s banks are happy to do so.
At a recent broker roadshow, ING DIRECT’s chief financial officer Mark Mullington said it had not thought about lifting rates above the RBA.
“We understand how our pricing plays a big part in our customer’s lives. We know that an extra 15 basis points can hurt our borrowers,” Mr Mullington told The Adviser.
“We are in this industry for the long term and we are not going to make friends by lifting rates unnecessarily. That said, we are a business, we will look at issues like funding costs as they arise and move in accordance with our findings.”
