Karl Stefanovic erupts at bank boss over skyrocketing interest rates as Aussies see their mortgage repayments double – while lenders rake in billions: ‘Forgive me for not celebrating’
Karl Stefanovic has grilled the CEO of the Australian Banking Association as Aussies struggle to keep up with rising interest rates.
The RBA’s latest quarter of a percentage point increase on Tuesday took the cash rate to a new 10-year high of 3.35 per cent – with Governor Philip Lowe signalling further increases in coming months.
ANZ and NAB have already announced they would pass on the interest rate hike, with other major banks expected to follow.
Speaking to the head of the ABA, Anna Bligh, on Thursday morning, Stefanovic questioned if banks were making profits by ‘manipulating the pace of reductions and rises’.
Karl Stefanovic has grilled the CEO of the Australian Banking Association Anna Bligh as Aussies struggle to keep up with rising interest rates
Ms Bligh said Australia’s banks would make a ‘healthy profit’ but argued it would benefit Australians.
‘That’s a good thing for the country. Their profits are going into your superannuation fund and the superannuation funds of hundreds of thousands of Australians,’ she said on the Today Show.
‘I don’t think Australia wants an economy with failing banks.’
Stefanovic then gloomily responded: ‘Forgive me for not celebrating’.
The breakfast show host had earlier said Australians were yet to see any of the major banks give families ‘a break’ when it came to interest rates.
Stefanovic then asked Ms Bligh if big banks passing on the hikes would help tip the country into recession.
‘That’s something that the Reserve Bank is really looking at and taking into account every time they meet,’ she responded.
‘The minutes of their meetings are telling us they’re very mindful they don’t want to go too far but they will keep doing what they need to do to bring inflation down.’
Ms Bligh urged Australians to talk to their banks and ‘shop around’ if they were feeling the pinch of rising interest rates
But Stefanovic hit back and said the banks were lifting rates twice as fast as they were cutting them, and were ‘quick to hike and slow to slice’.
The breakfast show host then asked why increased rates hadn’t been passed onto those with savings accounts, when they had been passed onto mortgage holders.
Ms Bligh said banks had increased rates on savings accounts from 0.3 per cent this time last year to 4 per cent.
When questioned who was receiving that 4 per cent, Ms Bligh said all of the major banks had that rate on term deposits.
She said the rate varied between different types of savings accounts and urged Australians to ‘shop around’.
‘But comparing the same product from this time last year to this year, I would tell you that self- funded retirees and people who are funding their lives from those savings are getting a much better deal after 10 very lean years where they were doing it tough while mortgage holders were getting very, very cheap money,’ she said.
‘I do want people to understand. Talk to your bank if you’re in trouble.’
NSW Premier Dominic Perrottet yesterday unleashed on the major banks for being so quick to pass on interest rate hikes, but being slow to cut them during the Covid pandemic.
‘I think they should be looking after families in a difficult economic time,’ he told the Today Show on Wednesday.
‘We’re going through challenges, families’ budgets right across our state are under pressure. We’re in NSW looking after our families with cost of living relief and I call on the banks to look after their customers and families across NSW.’
MORE RATE RISES ON THE WAY
Australian home borrowers have been smashed with a ninth straight interest rate rise – and the Reserve Bank is warning of more increases in 2023, with major banks tipping at least two further hikes.
The RBA cash rate has risen by another 0.25 percentage points to a new 10-year high of 3.35 per cent, up from 3.1 per cent, adding $93 a month to repayments on an average $600,000 mortgage.
Annual repayments are now typically $12,000 higher than they were in May 2022 and the Commonwealth Bank is now expecting two more rate rises by Easter that will make this even worse.
That would add another $281 to average monthly repayments, compared with now before the banks pass on the latest rate rise.
The Greens are calling on Treasurer Jim Chalmers to sack RBA Governor Philip Lowe after he warned on Tuesday afternoon of more rate rises in 2023, despite borrowers already enduring the steepest rate rises since a target cash rate was first published in 1990.
‘The board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary,’ Dr Lowe said.
‘The board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.’
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