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ISCOVER
Jessica Darnbrough
Moments after the Reserve Bank of Australia announced it would cut the official cash rate by 25 basis points, Australia’s lenders started to move.
Bank of Queensland was the first lender to show its hand, dropping its standard variable home loan rate by 20 basis points.
“Given the continuing pressure on the cost of funding a 20 basis point reduction is the best balance between our customers and shareholders," BOQ chief executive Stuart Grimshaw said in a statement.
Despite announcing its intentions to re-enter the broker channel more than five months ago, the lender is yet to make its mark on the broking space.
Regardless of whether or not BoQ distributes through the third party channel, its decision to pass on only part of the RBA’s 25 basis point rate cut opens the doors for Australia’s other lenders to follow suit.
While all of the lenders are yet to move on rates, few will be surprised if the banks choose to pass on just part of the rate cut.
In June, ANZ was the only major to pass on the rate cut in full, with the Commonwealth Bank of Australia, National Australia Bank and Westpac citing higher funding costs as the reason for the partial rate cut.
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