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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.

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BFCSA: ANZ pushes through bigger rate rise to offset weakness. More pain for Bank Clients

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ANZ pushes through bigger rate rise to offset weakness

Australian Financial Review Sep 6 2018 11:12 PM

James Frost, Patrick Commins

 

ANZ boss Shayne Elliott has acknowledged that funding costs alone have not triggered an out-of-cycle rate rise with softer business conditions also playing a role.

ANZ was first out of the blocks with a 16 basis point rise at midday on Thursday, followed minutes later by Commonwealth Bank with a 15bps rise of its own. Both were slightly higher than Westpac's 14bps rise from the week prior.

Mr Elliott defended his bank's marginally larger rate rise, saying pricing decisions were complex and required balancing the interests of many stakeholders including customers and shareholders.

"The market has slowed down as you know, housing is a bit slower and there are a few less mortgages out there," Mr Elliott said.

UBS analyst Jon Mott said the 16bps repricing of ANZ's mortgages would see the bank recover an extra $300 million in profits before tax, or twice as much as it was paying for funding.

"The mortgage repricing at CBA appears to more closely match its funding headwinds," Mr Mott wrote.

Commonwealth Bank CEO Matt Comyn said it was important that his bank be able to reprice its products in line with movements in financial markets.

"Over the last six months we've seen an increase in funding costs," Mr Comyn said. "They have remained elevated by about 25 basis points over that period of time although we have seen them spike higher."

CBA cited the rise in the 90-day bank bill swap rate as the key reason for lifting rates. The key bank funding cost has been as low as 1.69 per cent last October but as high as 2.12 per cent in June of this year. It has since eased to 1.95 per cent.

Two thirds of the funding sourced by Australian banks is tied to BBSW, and the sharp rise lift in the rate over the past year has squeezed banks' profit margins.

Treasurer Josh Frydenberg reiterated his warning that banks would need to explain to customers why they were raising rates.

"Any financial institutional which makes these decisions needs to explain to its customers why," Mr Frydenberg said in a statement to The Australian Financial Review.

ANZ's Mr Elliott said that the bank's products remained competitive with those of its Big Four rivals, and even more attractive when compared with the smaller banks.

Following the adjustment the standard variable rate for an owner-occupier principal and interest loan at ANZ is 5.36 per cent, at Commonwealth Bank 5.37 per cent and at Westpac 5.38 per cent. The standard variable home loan rate at NAB - which is yet to move - is 5.24 per cent.

NAB will be under increasing pressure to move with the rate rises helping rivals scoop up more than $1 million each day in additional revenue.

Analysts are not expecting funding costs to move markedly higher from here, limiting the prospect of another round of major bank out-of-cycle hikes in six months' time. But nor do they expect them to ease.

"There is an acceptance that it [the BBSW] will remain higher relative to history," Western Asset Management head of investment Anthony Kirkham said.

"It may not necessarily drive higher from here, but maybe this is the level going forward."

The prospect of higher borrowing costs for new and existing bank customers comes against a background of historically high levels of household indebtedness, as well as falling house prices in major markets such as Sydney and Melbourne.

Reserve Bank of Australia governor Philip Lowe has played down concerns around out-of-cycle mortgage rate hikes, pointing to evidence that average lending rates have actually fallen over the past year.

The moves by three of the four major banks complicates this story, but Dr Lowe is likely to reiterate in future communications that discounts are available for good quality borrowers, JP Morgan rates strategist Sally Auld said.

Economists have progressively pushed out the expected timing for a mooted official rate rise into the second half of next year and beyond, and the moves from the big banks reinforce the message that the central bank is "on hold for the foreseeable future", Ms Auld said.

"The longer this period on hold continues, the less chance the next move will be up," she said.

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