CLSA’s excellent Brian Johnston is on the money here:
Veteran CLSA bank analyst Brian Johnson said while funding costs had fallen, margins were still under pressure due to increased costs as investors coming to the end of their interest-only periods are forced to switch mortgage products to pay off both the principal and interest. Switching from variable to fixed products was also taking place.
“Wholesale [funding] is better and deposits are better but the latest results show switching has been worse,” he said.
