At the AFR:
The big four banks last week blamed falling profits from ultra-low interest rates for their decision to not pass on all of the Reserve Bank of Australia’s quarter-percentage-point cash rate cut to home loan customers. The central bank cut the cash rate to a record low 0.75 per cent last week.
But profit margins could fall even further if banks are forced to offer existing customers as good a deal on their mortgage rates as the deeply discounted rates being used to entice new business, which are typically around half of a percentage point lower, analysts warn.
