Wow. At 5:18pm on a Friday afternoon, ANZ announced the result of their April interest rate review: another increase of 0.06% in variable home loan rates and small business lending rates. This is in the face of significant public anger, mounting political pressure, intense media scrutiny and the strong likelihood of an RBA cut in a couple of weeks.
In recent years, normal bank practice would have been to wear any cost pressures until that next RBA move. But ANZ really is determined to bust that connection between the RBA rate and their home loan rates.
Their announcement quotes continuing pressure on funding costs as the reason, particular for term deposits.
But it also talks at some length about how they have considered their customers:
- they waited until they were sure the cost increases were sustained before passing them on;
- they have paced out the increases – 6 basis points in February and another 6 now;
- they are the only bank with a transparent process for reviewing rates
- their rates haven’t gone up relative to the market since they broke from the RBA timetable
All of these are true. But sadly for ANZ, I don’t think their customers will be listening to those sorts of arguments. Customer sentiment scores collected by Mozo over recent months clearly shows the Big4 falling further behind smaller home lenders, and ANZ in particular, mostly centred around early February when the ANZ last made a unilateral move. Customers see them putting prices up, seemingly at will. They feel powerless. And worse, they don’t believe for a moment that the banks care.
And I have to say that to make an announcement after 5pm on a Friday, on an issue as sensitive as this, is a very questionable choice. It will not help how people view ANZ, or the big banks in general.
Andrew Duncanson is the Research & Insights Director at mozo.com.au