Finance Finance News Big banks ‘profiteering’ on rate cuts: PM

Big banks ‘profiteering’ on rate cuts: PM

interest rate cut
Scott Morrison has accused the big four banks of "profiteering" on their decision not to pass on the full interest rate cuts to their customers. Photo: AAP
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Prime Minister Scott Morrison believes the big four banks are “profiteering” from their decision not to pass on the full interest rate cut to customers.

Treasurer Josh Frydenberg is also filthy at the banks for putting profits first.

“The banks have decided to put their profits before their customers,” he told ABC News on Thursday.

“That’s not a good outcome for their customers and it is not a good outcome for the economy and therefore, people should shop around and get the best possible deal.”

Official interest rates have dipped below one per cent for the first time, hitting a record low of 0.75 per cent in the third cut since June.

Westpac and ANZ joined the Commonwealth Bank and NAB on Wednesday to reveal their standard variable rates would drop between 13 and 15 basis points instead of the full 25 basis points.

“They never learn, they honestly never learn and it’s disappointing,” Mr Morrison told Sky News on Wednesday.

“Mortgage holders … have a reason to be disappointed in the banks, basically, profiteering.”

The banks argued they needed to keep some margins in a low interest rate environment, and protect customers who save deposits.

“They’ll put their explanations out there and the public will judge them based on what they say, but I’m not buying it,” Mr Morrison said.

Opposition Leader Anthony Albanese said the government couldn’t sit by and let the banks get away with it.

Comparison site Mozo estimates the big four banks have clung onto an extra $4.7 billion since 2016 by not passing on the full cuts.

The ANZ did pass on the full rate cut for people paying interest-only home loans.

The Reserve Bank is already preparing to cut rates further if the economy remains stagnant.