For Release: 8 December 2011
ANZ cuts interest rates for mortgages and small business
lending by 0.25%pa
- introduces special 2-year fixed term mortgage at 5.95%pa -
- future pricing decisions to be made on the 2nd
Friday each month -
ANZ today announced it will lower interest rates for variable
rate mortgages and small business lending by 0.25%pa.
Effective 16 December 2011, ANZ's new standard
variable mortgage rate will be
7.30%pa (7.40%pa comparison rate). New small business rates
are also effective from 16 December.
ANZ will offer a special 2-year fixed term mortgage
at 5.95%pa available from 12
December - a reduction of 0.20%pa on the current 2-year rate
and 1.35%pa lower than ANZ's new standard variable rate -
allowing home borrowers to lock in the
benefit of market expectations of further reductions in
ANZ CEO Australia Philip Chronican said: "In the face of the
economic and banking crisis in Europe, our decision on the
size of the interest rate change has been one of the most
difficult we have made in recent times. Retail banking
margins have been contracting as the cost of funds has
progressively risen over the last six
"Bank funding costs are now largely unrelated to movements in
the Reserve Bank's Official Cash Rate. We have therefore
taken a decision to announce future pricing changes for
retail and small business variable interest rates on the
second Friday of each month.
"This provides a measure of predictability for customers on
when rate changes will occur and it provides us with the
flexibility to reflect movements in funding costs across the
full spectrum of funding sources - not solely in response to
the Reserve Bank's cash rate.
"We know many people in the community are doing it tough at
the moment and, on this occasion, we felt that a decision to
reduce interest rates by 0.25%pa for home borrowers and for
small business was the right one in the circumstances.
"The significance of the crisis in Europe however has real
consequences for the global economic outlook, for the
Australian economy and for bank funding costs," he said.
For media enquiries contact:
Group GM Corporate Communications
Tel: 03-8654 9999 or 0434-070101
Senior Manager Media Relations
Tel: 03-8654 3659 or 0409-655 551
* See notes for editors.
Australia and New Zealand Banking Group Limited ABN 11 005
Notes for Editors:
Chart 1: Change in funding costs of Australian Retail
Term wholesale funding
+202bp x 49%
+102bp x 51%
Total increased funding cost of
relative to increases greater than the RBA Cash rate of
Incremental funding cost over pre-crisis level for
Retail segment only using Retail deposits and
Australia region wholesale funding costs as the funding cost
for Australian mortgages.
Chart 2: Indicative Term Funding Costs as at 7 October 2011
(basis points over
3 month BBSW)
Domestic - Senior
Offshore - Covered Bond
Offshore - Senior Unsecured
1 2 3 4 5 7 10