Jan. 13 (Bloomberg) -- Australia & New Zealand Banking Group Ltd. left its variable interest rates for home loans and small company loans unchanged, citing weaker demand for borrowing among customers.
The lender “assessed our competitive position, the subdued state of credit demand and the overall state of the economy and decided it was prudent to maintain our current rates at this time,” ANZ Bank’s Australian division Chief Executive Officer Philip Chronican said in a statement today.
The announcement is the first time the Melbourne-based bank instituted its policy announced Dec. 8 of declaring decisions on mortgage rates on the second Friday of every month. The bank is seeking to decouple itself from the Reserve Bank of Australia’s interest-rate cycle, in which policy makers meet on the first Tuesday of every month except January.
“These higher interest rates we are now paying our depositors and the elevated prices we are required to pay for wholesale funds are going to be sustained given the volatility we saw late last year,” Chronican said today.
Australian lenders face increased pressure over mortgages after the government warned banks last month that customers would be “rightly angry” if any RBA rate cut wasn’t passed on in full.
Central bank Governor Glenn Stevens will reduce the benchmark overnight cash rate target next month to 4 percent from 4.25 percent, adding to quarter-point reductions in November and December, according to 15 of 20 economists surveyed by Bloomberg.
--Editors: Malcolm Scott, Russell Ward
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