Banks caught out on costs
THE big four banks have fattened their margins while complaining about being squeezed, new figures reveal.
As Parliament prepares to debate legislation forcing banks to lift rates by no more than the Reserve Bank, figures from the Australian Prudential Regulation Authority indicate the average rate paid by the big banks on money they borrowed rose by less than the official cash rate.
''Whereas we have been angry about banks not moving in lock step with the Reserve, we should have been concerned their actual costs weren't even keeping pace with Reserve Bank increases,'' said Richard Denniss, the director of the Australia Institute, which analysed the figures.
The figures show that while the Reserve cash rate rose 1.36 percentage points between the June quarters of last year and this year, the average rate paid by the big banks rose 0.88 points. The lower rate would have been because rates on some of the funds banks borrowed went up more slowly than the Reserve cash rate.
''It's like making hamburgers. If meat accounts for a third of your costs and the price of meat goes up 10 per cent, you shouldn't be expected to put the price of hamburgers up 10 per cent,'' Dr Denniss said.
Read more at Brisbanetimes.com.au.