ANZ, NAB pass on 25bp rate cut; NAB announces $1.8b three-month profit
ANZ and NAB have passed on the Reserve Bank's latest rate cut in full, and NAB unveiled a $1.8 billion quarterly profit.
Following the announcement of a 25-basis-point cut by CBA and a 28-basis-point cut by Westpac yesterday morning, NAB will lower its standard variable mortgage rate (SVR) by 25 basis points to 5.63 per cent.
ANZ has matched that move, leaving the two banks with the equal lowest standard variable mortgage rates amongst the big four.
As with CBA and Westpac, NAB's customers will have to wait until February 20 for the rate reduction to take effect on their mortgages.
However, ANZ customers will receive lower mortgage rates from next Thursday, February 12.
"Wholesale funding costs have eased a little bit over the last year or so and that's taken a little bit of the pressure off," acknowledged the head of ANZ's Australian operations, Phil Chronican in a statement.
Michelle Hutchison from rate comparison website Finder said her firm's analysis of the big four banks over the past five years shows rate rises are passed on much more quickly than rate cuts.
"The big four banks took 11 days on average to pass on a rate cut to variable home loan customers, yet managed to pass on rate rises in just seven days," she observed.
"The longer a bank holds on passing on a rate cut, the more money they'll squeeze from Aussie pockets before finally adjusting their rates."
NAB said the new SVR is its lowest rate in nearly 40 years, while Westpac and the Commonwealth said their current rates are the lowest since 2009.
NAB posts $1.8b profit in three months
National Australia Bank would seem to easily be able to afford the rate cut, this morning reporting a $1.8 billion unaudited profit for the December quarter in its latest trading update.
The bank's preferred measure of cash earnings was $1.65 billion for the last three months of 2014, up 6 per cent on the prior corresponding period.
NAB said revenue rose 4 per cent, but was up a more modest 2 per cent excluding various asset sales.
Expenses fell overall, but excluding one-offs, costs increased by around 4 per cent.
The bank's chief executive, Andrew Thorburn, said NAB is on the way to exiting underperforming UK and US businesses, and has recorded solid growth in its key Australian market.
"Australian home lending continues to generate strong growth and has now delivered 20 consecutive quarters of above system growth," he observed.
"While the improvement in our core business banking franchise will take time, volume growth is now around system levels and we are well advanced on the hiring of additional business bankers. However, we continue to see intense competition for business lending."
