Commonwealth Bank of Australia (CBA) is slashing its standard variable rate (SVR) on mortgages by as much as 40 basis points to 7.01 percent per annum starting 11 May 2012.
It is the second of four big lenders to follow the Reserve Bank’s move to cut interest rates by 50 basis points this week.
The first was National Australia Bank, which cut its SVR by 32 basis points to 6.99 percent, while ANZ Bank said it will announce its decision by next Friday.
CBA’s decision to reduce its SVR on mortgages has put the squeeze on Westpac to do the same, with the lender expected to announce its rate decision on 4 May.
“As you all know it’s been a very volatile environment over the course of the past six months; a low growth environment, and intense competition particularly with regards to retail deposits,” said Gail Kelly, Chief Executive of Westpac.
Westpac noted that the firm’s retail and business banking as well as institutional divisions recorded solid earnings in a volatile environment. However, its St George bank operations saw lower earnings and the margin coming from interest earnings fell during the period.
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