Personal Loans Online News

Wed, 2 May 2007
Interest rates on hold: reprieve for homeowners
In a boon for the nation's mortgage belt, the Reserve Bank decided at its quarterly meeting on May 1 to leave the official cash rate unchanged at 6.25 per cent. The Reserve Bank's decision followed the publication of a much lower than expected March-quarter consumer price index, which showed inflation rose just 0.1 per cent for the quarter and 2.4 per cent for the year. This was well within the Reserve Bank’s target of 2-3 per cent. In a rare show of consensus, many economic forecasters are now predicting a further easing in inflation and most believe interest rates will stay on hold for the rest of 2007, particularly given the impending federal elections.

Wed, 15 August 2007
Interest Rates Will Rise
CBA CEO Ralph Norris conceded that there may be an increase in interest rates as a result of the US subprime mortgage crisis for all Australian lenders, or the strength of the local economy. Increases in home loan rates could flow through from the on-going turmoil in credit markets caused by the subprime mortgage funding crisis in the US.

Tue, 04 September 2007
Rate worry as GDP surges
More bad news may be ahead for borrowers, with the latest national accounts figures pointing to quickening growth, bringing with it a greater chance of higher interest rates. Australia's economic performance took a leap in the June quarter, propelled by expanding investment by businesses and extra spending by state and federal governments. The country's Gross Domestic Product (GDP) grew a seasonally adjusted 0.9 per cent in the April-June period. While slower than the 1.6 per cent pace recorded in the previous three months, it easily topped market expectations of just 0.5 per cent.

Thu, 18 October 2007
ANZ reorganises Asia Pacific division
ANZ is positioning itself for further growth in Asia, with the announcement yesterday that it has developed a new organisational structure for its Asia Pacific division. The bank will split the retail and institutional parts of the business.

Mon, 07 January 2008
Rates on Private lending upward bound
A surprise jump in private sector borrowing has sparked predictions of another interest rate rise in February.

Citigroup director of economics Stephen Halmarick said the private sector credit data added to the case for another interest rate hike in February.

"In light of the credit concerns in recent months, today's data highlights that credit is still accessible and is clearly still not considered expensive by borrowers, adding further justification for the November rate hike," he said.

"With the economy still growing above potential ... today's data reinforces our forecast of an interest rate rise by the RBA in February of 2008."



Sun, 25 May 2008
Borrowers dig deep as banks pile on the fees
HOUSEHOLDS and businesses paid more than $10 billion in bank fees and penalties last year, the Reserve Bank has revealed amid concerns that the proposed merger of Westpac and St George could further tighten banks' grip on consumers.

A separate report by the banking industry showed households paid an annual average of $220 in bank fees and duties, excluding charges on home loans. The top 20 per cent of income earners shelled out $415.

Reserve figures published yesterday show the proportion of fees paid by households, for example in credit card or mortgage charges, hasrisen steadily compared with the share forked out by businesses.

The Reserve Bank said banks appeared to be imposing more charges rather than lifting existing ones, including imposing more fees for late credit card payments, currency conversions and exceeded credit limits.

"Over the past five years fee income from credit cards has grown by 170 per cent," the Reserve's market snapshot said.

The average fee on late credit card payments is $31, while the average penalty on exceeding a card's limit is $30.

"We've argued that both those fees are intrinsically unfair," said Elissa Freeman, a senior policy officer at the consumer advocate Choice. "With late payment fees the bank already has the benefit of the interest payments that consumers have to continue to pay. The fees should reflect their cost to the bank."

Fees charged on home loans increased 8 per cent last year, compared with average annual growth of 11 per cent between 2001 and 2006. Credit card fees rose 12 per cent, against 25 per cent annual growth over the earlier period.

The Australian Bankers Association said the increasing supply of no-frills cards was evidence that banks were listening to community concerns about fees. The association's chief executive, David Bell, said the volume of banking business had outstripped the fees banks had charged.

The focus on fees comes as banks tighten their grip on the mortgage market, thanks to the crippling of smaller lenders by the financial crisis.

The country's biggest mortgage lender, Commonwealth Bank, yesterday signalled it had benefited from a "flight to quality" as non-bank and smaller lenders had closed or reduced business.

Commonwealth's chief executive, Ralph Norris, also said there could be more bank-driven rate rises to come. "The fact of the matter is over time interest rates being charged will increase unless we see significant drops in rates internationally and locally," he said in a market update.

Consumer advocates have warned that competition in the banking sector would be weakened by the planned merger between Westpac and St George, giving banks more muscle to extract higher fees.

The strong retail presence of both banks in NSW is expected to be a sticking point for the competition regulator.

Ms Freeman said the high fees pointed to a weakness in competition, with a "potential for even lesser competition if the merger goes ahead".

Bank fees could come under the microscope if the Government adopts a recent Productivity Commission recommendation for new laws that would enable customers to challenge the legitimacy of "unfair" fees and contracts.

TOP 5's BILLIONS

Latest half-year profits for the top five banks, which in 2007 turned in almost $18 billion between them.

Commonwealth $2.3 billion

NAB $2.2 billion

ANZ $1.96 billion

Westpac $1.84 billion

St George $603 million

SOURCE: Jacob Saulwick - Sydney Morning Herald

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