Banks Try to Manage Costs

ANZ chief Phil Chronican said Australian banks continue to be hounded by increase in operation costs and there is a need to manage the business.

Chronican made the statement as the banking industry is gearing up for the interest rate cut of the Reserve Bank of Australia. RBA is expected to make a 25-basis point cut.

Just last week, some of the biggest Australian banks were criticized for adjusting their standard variable mortgages and making it lower than the official rates. NAB and CBA have lowered their rates by about 20 basis points while Westpac reduced its rates by 18 basis points.

Chronican said funding for banks continue to increase. The upside is that costs appear to have stabilized for the rest of the year.

Even then, Chronican said ANZ continues to monitor costs. It is also currently refinancing borrowings that were implemented three to five years ago.

Treasurer Wayne Swan, meanwhile, advised bank customers to canvas and look around. He added that this is the right time for home owners to start reviewing their mortgage and see if they can find better interest rates.

Swan said that consumers must step up and be proactive in managing their mortgage. If consumers are not happy with how the banks are treating them, then they should not put up with it.