ANZ: Customers just need education
An ANZ spokesperson told the Age the bank’s interest rate policy had created “public relations” challenges, but said: “We are in it for the long haul and part of that is an education process for our customers and us.”
ANZ had announced on May 11 that it would cut its standard interest rate for variable mortgages and small business by only 0.37%, even though the Reserve Bank cut the official cash rate by 0.5% on May 1. The 0.13% margin will count as a windfall gain for the bank at the expense of mortgage holders. Other banks are likely to follow suit.
The news follows ANZ’s interest rate rises of 0.06% in February and a further 0.06% rise in April, both of which took place even though the Reserve Bank held the official rate steady.
ANZ Australia CEO Phillip Chronican told the Age last month that the bank was merely recovering rising costs, not increasing its margins. On May 2, the bank announced an after-tax half year profit of $2.92 billion — a 5% rise.
ANZ’s costs are lower, not higher
The Australia Institute said on May 2 that the big four Australian banks — ANZ, NAB, Westpac and Commonwealth — make about $12 million from mortgage holders for every day they fail to pass on the Reserve Bank’s 0.5% cut.
The Australia Institute also said its analysis of ANZ’s financial reports revealed, “the bank has been crying wolf about cost pressures at the expense of its customers”. It said ANZ’s report for the half year to March 31 showed ANZ’s interest costs had fallen by 2%. The Australia Institute’s David Richardson said: “The banks are engaging in a phony debate about the cost of borrowing. For the banks it is a very profitable debate.”
ANZ: Executives face terrible job insecurity
In an April 4 speech to the US Chamber of Commerce, ANZ Australia CEO Phillip Chronican said he did not understand why most Australians object to high corporate salaries. Chronican was paid $2.2 million last year.
The Sydney Morning Herald reported that he said Australians “seem happy and even proud” of high-paid sports and movie stars, “yet for some reason when people are managing large complex businesses it is seen as excessive”. Chronican said high corporate wages were needed because, “just like sports people and entertainers, senior executives’ careers do come to an abrupt end”.
In February, Chronican cited ANZ’s “higher funding costs” to explain the axing of 1000 ANZ staff, bringing their careers to an abrupt end.