Westpac Draws criticisms for raised rates
In this time of global financial crisis, money is hard-earned. Every cent spent has to go to something that is useful. Every dime is important and it should be well-spent. But while this is the current scenario in Australia, Westpac has raised its rates on interests. The raise has been so high that it has surpassed even the Reserve Bank’s official rises. This has gained the bank criticisms from politicians, officials, and consumer groups.
This event followed after Westpac raised its rates by 45 basis points last December 2009. Before that, it also raised its rates by 25-basis-points RBA rate. The raise seemed like it was patterned after Cyclone Larry in 2006 where the prices of bananas rose.
According to Westpac Chief Executive Gail Kelly, the said rises are part of the bank’s move to cope with the global financial crisis. According to her, “I feel we’ve stared into the all of the headwinds of what’s been a very difficult environment, through the global financial crisis of much enhanced difficulty of funding costs, and all of the stresses and strains we’ve just spoken about.”
“There’s no question towards the end of 2012 that situation will plateau and our average funding costs will start to plateau because marginal funding costs will be coming down and into 2013 and ’14, we can see it today the amounts of money we raised at the height of the crisis in 2009 and ’10 starts to mature and hopefully we’ll be able to replace that at a much cheaper level,” said Ms. Kelly.
The bank is hopeful that it will be able to recover soon from the turmoil that presently affects it. But the consumers are the ones who are even more hopeful so that they will not be buried much deeper into their debts.
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Source : http://www.abc.net.au/news/stories/2011/03/07/3157347.htm
