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Wayne Swan on Westpac

Posted by Tamara McDowell on March 24, 2010

| 24 Mar 2010

Federal treasurer Wayne Swan has again slammed Westpac, claiming the bank has become a “serial offender” in “taking its customers for a ride”.

Referring to Westpac’s latest decision on credit card interest rates and its supersized home loan rate hike in December, Swan said this was “exactly why people don’t like the big banks”.

At 7.01%, Westpac’s variable home loan rate is the highest of all the major lenders. By contrast, Credit Union Australia announced yesterday it was cutting its variable rate by 25 basis points, opening up a yawning gulf between it and the big banks. CUA’s standard variable rate is now 6.37%, 0.64% lower than Westpac’s.

A professor of finance at the University of NSW, Fariborz Moshirian, told The Australian Financial Review that there was in fact no justification for extra rate rises by the banks, as international credit markets had settled in recent months.

 | 23 Mar 2010

The chairman of Westpac, Ted Evans, has admitted that interest rates would continue to rise independent of official RBA rate hikes for at least the next five years.

In an interview with The Australian Financial Review, published today, Evans warned that the RBA cash rate was no longer the primary guide for bank interest rate movements.

“Other influences are simply that much more important at the moment, because of what’s happening globally,” he said. “That will remain the case for many years to come, may even remain the case forever.”

On the 2008 St George merger, Evans said business was going “extraordinarily well”. He added that part of the reason Westpac customers were slugged with a supercharged rate rise in December was that the bank was attracting too many mortgages.

Evans also told AFR that Westpac was no longer opposed to the government’s Four Pillars policy.

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