(Reuters) – Westpac Banking Corp (AX:) and Australia and New Zealand Banking Group (AX:) joined the country’s other ‘Big Four’ lenders in skipping the chance to pass on the central bank’s rate cut in full to customers due to ever-thinning margins.
Westpac and ANZ’s decision on Wednesday comes despite pressure from the country’s Treasurer Josh Frydenberg to do so after the Reserve Bank of Australia lowered its benchmark cash rate to an all time low of 0.75% on Tuesday in an attempt to kick-start the economy.
However, analysts have warned that the three rate cuts this year and any further central bank easing may inflict even more pain on Australian banks’ net interest margins.
Westpac said it would lower variable home loan interest rates by 15 basis points, while ANZ said it would lower it by 14 basis points.
The move follows similar reductions by Commonwealth Bank of Australia (AX:) and National Australia Bank (AX:) hours after the RBA’s cut.
The banks have argued that they face a difficult balancing act with rates approaching zero, which has raised questions about the effectiveness of super easy monetary policy.
The top four lenders have resisted public pressure in the past to fully pass on the earlier two central bank rate cuts to customers.
CBA lowered its standard variable owner-occupier interest rates by 13 basis points, while NAB lowered by 15 basis points.
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