Explainer | Some customers are annoyed and a treasurer is not happy. But the banks say they are performing a complex balancing act. So what are they balancing? |
Feeling miffed your bank hasn’t passed on the Reserve Bank’s interest rate cut in full?
"The inquiry is a good opportunity to provide facts in what is a complex space," ANZ boss Shayne Elliott said. The first is depositors – that is, people with savings in the bank. About half of the money Australian banks lend out comes from deposit holders. Bank margins have been squeezed again more recently as wages growth has slowed, and consumers have become more cautious about borrowing. Essentially, the same set of lenders are chasing a smaller pool of potential borrowers.
For banks, it means they are hitting a new floor to how much they can keep pay depositors less to protect their margins.ANZ CEO Shayne Elliott: "A complex space".Of course, it's only proper for banks to consider the interests of their shareholders, which include most working Australians through their super funds.One measure of profit – returns on shareholder equity – has shrunk from more than 20 per cent to more like 10 to 15 per cent, on average, for the big four.
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