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ANZ has become the second major bank to announce interest rate raises to some of its business lending products.
The bank said in a statement that its Equity Manager Rate has increased by 27 basis points to 5.98 per cent.
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ANZ also said that all overdraft and term loan business lending linked to the following indices has been raised by 21 basis points:
- Business Credit Facility Index (now at 8.30 per cent)
- Business Mortgage Index (now at 7.37 per cent)
- Business Saver Index (now at 6.87 per cent)
- Fully Drawn Advance Variable Index (now at 9.17 per cent)
- Reference Rate (now at 9.05 per cent)
- Retail Index (now at 8.97 per cent)
- Business Advantage Secured Index (now at 7.37 per cent)
- Business Advantage Unsecured Index (now at 9.37 per cent)
- Esanda Dealer Reference Rate (now at 4.40 per cent)
- Funding Index with a bank bill swap bid rate (BBSY) reset of more than 63 days (now at 1.17 per cent)
- Funding Index with a BBSY reset of less than or equal to 63 days (now at 1.25 per cent)
ANZ said that while the bank’s commercial lending rates remain close to historic lows, the environment is changing.
“Bank funding costs have been rising since May last year in anticipation of an increase in US interest rates by the Federal Reserve,” it said.
“With the increase in US interest rates announced in November, these higher funding costs are now locked in for the foreseeable future, and while we have worked hard to absorb as much as possible, we now have no choice but to pass on some of the higher cost."
ANZ also noted that regulatory costs are continuing to increase.
“Last year we saw an increase in the capital regulators require major Australian banks to hold. In December, regulators also outlined new liquidity requirements in Australia which have also had the effect of increasing overall funding costs,” the bank said.
ANZ’s announcement comes after NAB recently confirmed a number of interest rate changes to some of its business loans.
[Related: Rate hikes ‘a significant blow’ to housing affordability]
