CBA defends home loan hike after bumper profit
Article by Mozo
Commonwealth Bank (CBA) has once again been forced to defend its large November interest rate rise after reporting record cash earnings of $3.3 billion for the six months to the end of December.
The bank sparked outrage back in November when it chose to lift its standard mortgage rate by 45 basis points – a move that nearly doubled the official cash rate increase announced by the Reserve Bank.
However, while the move may have encouraged some borrowers to compare home loans and consider switching, CBA's new figures also show that the bank actually increased its mortgage lending over the six-month period to record a five per cent profit increase.
"Clearly there will be and have been challenges along the way," said CBA chief executive Ralph Norris in comments reported by ABC News. "The decision to increase our home loan standard variable rate in November was one such challenge.
"While this has clearly had an impact on our customers, this is absolutely the right decision in the context that the sustained, elevated funding costs that have been and continue to be faced across the industry."
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