ANZ has joined the other three big banks in dropping home loan interest rates following the Reserve Bank’s official interest rate cut.
But, unlike the NAB, CBA and Westpac, it won’t pass on in full the RBA’s 25 basis point reduction.
The ANZ says it will reduce its standard variable home loan rate by 19 basis points, rather than the full 25 points, citing rising wholesale funding costs.
“While we’ve absorbed this for some time and taken steps to reduce costs in our own business, higher funding costs mean we are only in a position to pass on a portion of the reduction in the cash rate to our customers,” ANZ group executive Fred Ohlsson said in a statement.
The ANZ on Tuesday announced it was cutting its dividend for the first time since the global financial crisis following a near 25 per cent slump in its first-half profit to $2.782 billion – its lowest since 2010.
The RBA on Tuesday afternoon cut its cash rate by 25 basis points to a fresh record low of 1.75 per cent.
National Australia Bank was the first out of the block after the RBA announcement, cutting its standard variable home loan by the full .25 percentage points, effective May 16.
Westpac followed, cutting its standard variable rate by 25 basis points, to 5.43 per cent, from May 23, while Commonwealth Bank said it would cut its standard variable home loan rate by the same amount, to 5.35 per cent, effective from May 20.
The central bank said the cash rate cut was aimed at pushing the nation’s sluggish inflation rate into its two to three per cent target band.