02/12/2008 - 12:40

CommBank, NAB pass on full rate cut

02/12/2008 - 12:40

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The Commonwealth Bank of Australia and the National Australia Bank have been swift in their response to the central bank's 100 basis point cut, passing on the full reduction to their customers.

The Commonwealth Bank of Australia and the National Australia Bank have been swift in their response to the central bank's 100 basis point cut, passing on the full reduction to their customers.

Earlier today, the Reserve Bank of Australia lowered the cash rate from 5.25 per cent to 4.25 per cent, the fourth month in a row the bank has slashed rates.

CBA said in a statement that its Complete Home Loan Variable Rate will be cut to 6.74 per cent, from 7.74 per cent.

NAB's new standard variable home rate will be cut to 6.74 per cent, effective December 12, the Melbourne-based bank said in a statement.

Meanwhile ANZ and Westpac have stopped short of passing on the full rate cut.

Westpac, which is the largest Australian bank by market value, will reduce its variable mortgage rate by 80 basis points to 6.91 per cent, effective December 8.

The bank will also cut its small business lending rate by 80 basis points.

"While government guarantee measures have helped restore confidence to global financial markets, short-term and long-term wholesale funding costs remain extremely volatile, and at record levels," Westpac retail and business banking group executive Peter Hanlon said in a statement.

"In spite of this continuing volatility, Westpac is pleased to deliver further timely relief to households and small businesses in the lead-up to Christmas."

ANZ, the fourth largest of Australia's big four banks, will reduce its variable home loan rate by 83 basis points to 6.91 per cent, the Melbourne-based bank said in a statement.

The reduction will take effect on December 12.

"The Australian government's guarantee on wholesale funding is likely to ease constraints, however this comes at a cost and international markets for wholesale funding continue to be difficult," ANZ chief executive for Australia Brian Hartzer said in the statement.

"As soon as market conditions allow, we will pass on further reductions in funding costs to our customers."

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