The Federal Treasurer has criticized the big four banks for quickly passing on interest rate rises to borrowers but not to depositors. He expressed disappointment and plans to discuss the issue with the banks, highlighting that people relying on savings have been adversely affected by historically low interest rates.
In a conversation with Neil Mitchell on 3AW Mornings, Shayne Elliott, Chief Executive of ANZ, responded to these criticisms. Elliott acknowledged the comments made through public media and defended ANZ's actions. "We have put our best foot forward on a savings product," he said, mentioning their 2.5% savings account rate as competitive among major banks.
Elliott noted that while deposit rates were raised recently, "we put our rates up about the same time" as borrower rates, suggesting there was no significant gap between the two adjustments at ANZ. He explained that not all deposit accounts receive top-level rates due to varying account types.
Regarding home loan rates, Elliott admitted they would be higher than deposit rates but could not specify exact figures without further details. When asked about term deposits offering very low returns seen online, he attributed it to outdated products and assured that current term rates are higher.
Mitchell questioned whether existing customers might feel disadvantaged compared to new customers receiving better deals or cashback offers. Elliott likened this to price variations in other industries like airlines and supermarkets, emphasizing market dynamics and long-term contract commitments.
Elliott also discussed broader economic concerns such as potential economic recovery challenges and cost of living pressures. Despite acknowledging these issues, he reported no significant increase in distressed borrowers at ANZ. "Households have never been stronger," he stated, noting many customers are ahead on their mortgage repayments.
On employment within ANZ, Elliott confirmed ongoing job vacancies in specific areas like software engineering and customer-facing roles due to labor shortages.
When asked about the future of bank branches, Elliott did not foresee their complete disappearance but anticipated changes in their function due to evolving customer preferences.
The discussion provided insights into banking operations amid rising interest rates and economic uncertainties.