Non Bank Lenders attack Banks on rate rise

January 10, 2008
Article from AAP

NON-bank lender Resi Mortgage Corporation says the banks have misrepresented the true impact of the global credit crisis after a third big lender increased rates on home loans.

The Commonwealth Bank of Australia Ltd (CBA) yesterday followed the Australia and New Zealand Banking Group Ltd (ANZ) and the National Australia Bank Ltd (NAB) to lift interest rates independent of any action by the Reserve Bank of Australia.

Resi's head of consumer advocacy, Lisa Montgomery, said Australian banks had used the global credit crisis to disparage the reputation of non-bank lenders to claw back market share.
 
"At the time major banks delivered a barrage of negative comments informing consumers that non-bank lenders would be more adversely affected (than banks) by the increased cost of funding, which would be reflected in significantly higher interest rates," Ms Montgomery said.

"In doing so they gave consumers the false impression that all non-bank lenders will cost them more to borrow - which is simply not true.

"The fall-out from the situation in the US was clearly going to be an issue for all lenders."

Westpac Banking Corporation Ltd and St George Bank Ltd remain the only two major banks that have not increased their standard variable home loan rates - but analysts tip it is only a matter of time.

A Westpac spokesperson declined to comment on media speculation that the bank would raise rates today, and said rates "continue to be under review".

CBA lifted its standard variable rate on home loans 0.10 per cent to 8.67 per cent, half the ANZ increase of 0.20 per cent, which was described as "excessive" by Treasurer Wayne Swan.

NAB increased its rate 0.12 per cent to 8.69 per cent.