Westpac margins catch virus with full cut

Loss of moral standing means no social capital to withold interest rate. That and imminent government sponsorship. Westpac the first with 25bps. Understandably, markets are not impressed, bashing WBC to eight year lows as its margins catch the virus:

Now CBA.

David Llewellyn-Smith
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      • NAB 3.09 special offer before this, plus 4k re-fi or 2k new business <- this offer stilll active for loan drawdown before June 30. They'll say no to both the 3.09 special IR + the bonus, but just push hard/back and they may relent
        WBC 3.10 (LVR under 70%) plus 3k refi <- we took that. this is on the premier advantage package, had that waived year 1.

  1. Hang on a moment, cobbers, I thought banks weren’t meant to pass on the cut and that the monetary transmission mechanism is broken beyond repair?

    What’s changed in the last 120 minutes?

    • Even StevenMEMBER

      That’s a fair question, Peachy. Honestly, I was in MB’s camp on this one (i.e. further rate cuts unlikely to be passed on in full). Perhaps there is some “you scratch my back, I’ll scratch yours” happening behind the scenes that we’re not aware of.

      • “Not aware of”???

        How much more overt do things have to be? The PM is a property guy, ffs.

        None are so blind as those who will not see!

        • Even StevenMEMBER

          Yes, but I don’t know what leverage the government has over the banks other than the usual jaw-boning. The banks are not going to fail. There’s no imminent financial collapse requiring government guarantees. So why pass on the rate cut in full? Clearly I’m missing something.

          • You’re missing the obvious (somehow….after all these years….). Everyone (everyone that matters) wants house prices to rise. They have been acting accordingly.

            Now, eventually everyone wanting it may not be enough. But we’re not there yet.

    • RBA now committed to bailing out the banks if needed and start QE.
      Westpac now doesn’t care and will give mortgages to anyone who wants one.
      They would have even passed on a 0.5% cut. Its all in

    • Could be that the elites are talking to one another, panicking, and realising that they need to do what they can to juice the economy – such as passing on full rates cuts, where they wouldn’t normally

      • If that is meant to be an insult, just remember that Mig was on here telling people to buy it when it dropped below $200 USD in 2015. The current price is 8800 USD. So unlike a like a lot of us here Mig has done very well, in fact, going off things he has said in the past I’d say that the value of his current holdings would be in the region of 5 million. Not to shabby.

        • I remember that very clearly! I just didn’t u8nderstand the stuff and still don’t. Mig’s words have reverberated through my head often.
          Who is the best investor – Mig or Reusa????

  2. Holly crap, you know things are bad when banks actually pass on the full cut. They are actually scared of people defaulting on mortgages and sucking up to the govt because they are going to need that public insurance policy.
    Now’s not the time to be p1ssing off the people who you are relying to bail you out shortly. This just changed everything.

      • happy valleyMEMBER

        The banks, RBA, ScoMo and Josh also on the same page r.ping depositors? The gang bangers?

    • This is a biggest eye-wash I have ever seen.

      The press-release from Westpac says “full rate cut passed…. now the interest rates are 4.58% for owner occ and 5.39% for inv.”. But most of their products are priced at/around 3.10% – 3.80%. Will 3.10% go to 2.85%? the answer is No.

      I dont know anyone (not that I know many ppl with Westpac HL, most I know are lot better than that they are with Pepper 🙂 ) who is paying 4.85% on owner-occ with Westpac before rate cuts.

      • If you are on the standard variable with lifetime / life of loan discounts negotiated then the 25bps will apply on the std variable and flow down to your base rate

        We are on net rate of 3.10 after discounts, this will go to 2.85

  3. Property bulls, enjoy the last little move up because we are getting very close to the bust

    Tick tick tick ….

      • Get ready stadia
        When I said ASX would fall from 7200 to 6,000 and gold down from 1690 same comments
        GFC 2.0, they are all going down 1 by 1
        We ain’t far away
        Pushing on a string now

        • Oh, mate, THANKYOU!

          I’d forgotten the “pushing on a string” – that’s what they’ve been doing since OCR was at 1.5% or so. Need to add that to my list of funny anecdotes to rehash from time to time.

        • Pushing on a string reminds me of another great saying I heard recently “Coke Dick”. haha.

    • Nicole Sanchez

      8 years ago “Don’t buy now!” 12 months ago “The bubble is bursting!” Today?
      So much conviction about coronavirus going to be the end of the Australian economy and property. Yet the government seems to find new ways to prop it up. Sometimes I think MB is an echo chamber and people will be saying the crash is still coming in another 8 years time…

      • Not this time N S
        And you are relying on the government to save you, you are really in trouble
        The debt levels are now so extreme that the momentum down is too powerful.
        When the economic crash comes in next 2 months cash rate will be zero
        That’s it home loan rates are 3% already
        You wait NS in 6 months, the falls are coming
        The bubble is going to burst before June 30 this year

        • Nicole Sanchez

          I’m not relying on the government to save me at all.
          Don’t you see that you and others have been saying the same rhetoric for years?
          I’d be interested to see the position someone who bought 8 years ago is in compared to someone who bought into the “don’t buy now” mantra.

  4. End-game mode.

    Always ends well.

    Meanwhile:

    “just this past week, the number of affected countries shot up from 29 to 61”

    Buy a house!

    • Well, you still need somewhere to live, even if there are sick people in 60 countries, nay?

      • I heard that
        A friends company is saying to their staff
        Start preparing to work from home

        • A friend gave it to me yesterday. Unfortunately it doesn’t work. But I am thinking of getting a small bar fridge to put under my desk and stuffing it with my favorite beers. 😀

      • SnappedUpSavvyMEMBER

        nice! like the laptop open with MB comments

        is that some of the now world famous mudbrick wall to the left

        • Yes indeed, I’m in a muddy. 🙂 I have to say the climate inside is perfect. I haven’t had to turn on any aircon or heating yet. Will be interesting to see how winter is in the house, but at night when the temps drop the home stays nice and warm.

  5. happy valleyMEMBER

    And when are the big 4’s offshore wholesale funders going to say it’s time to pull the pin on their funding for our “unquestionably strong” banks?

  6. “Australia’s Central Bank cut interest rates and stated it will most likely further ease in order to make up for China’s Coronavirus situation and slowdown. They reduced to 0.5%, a record low. Other countries are doing the same thing, if not more so. Our Federal Reserve has us….” ….. Trump

    The RBA is praised by the greatest muppet leader in US history.

    Something to behold.