CBA announced its results today – a lazy $6 billion annualized profit! It made for interesting reading. They say that the cost to fund new loans has increased 1.12% since July 2007. This doesn't mean that this new cost level applies to all home loans. Some home loans are funded using facilities established before the credit crisis. Some loans are funded using cash in transaction accounts (paying effectively zero interest).
Now, the Bank has increased home loan rates by a total of 1.04% above RBA rate movements (per http://www.keepbankshonest.com.au/) across their whole portfolio of loans.
It’s been a bonanza for the Bank enjoying huge market share gains – while probably increasing profit margins! It goes to show… we should never believe the banks propaganda... they are making billions!
Note to government: BRING BACK HOME LOAN COMPETITION... please.
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