Ross Greenwood asks Commonwealth Bank CEO why the bank has raised rates
In light of recent activity by the Commonwealth Bank, Ross Greenwood suggests the Reserve Bank has become irrelevant in terms of setting interest rates.
Commonwealth Bank reported a half year profit record of $4.2b, yet 32 minutes later it increased interest rates for investors in property loans.
Speaking to CEO of the Commonwealth Bank Ian Narev, Ross questioned whether why all stakeholders are not sharing in the bank’s financial success.
‘The rate is independent of the results… it responds to a regulatory requirement to keep lending growth in investor loans at less than 10% a year.’
‘We take the limit very seriously’.
The bank will not take on refinancing of investment loans from other banks as part of its measures.
‘The first thing we’ll do is make sure we have the capacity to look after our existing customers’ said Narev.
‘The Reserve Bank remains the critical rate setter in the economy… [it] is not the only factor’ in setting rates.
Listen to the full interview here: