Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

CBA (ASX:CBA) And ANZ (ASX:ANZ) Both Cut Interest Rates

Commonwealth Bank of Australia (ASX:CBA) has announced that it intends to pass on the full rate cut by the RBA to consumers. 

Commonwealth Bank of Australia (ASX: CBA) has announced that it intends to pass on the full rate cut by the RBA to consumers.

The Reserve Bank of Australia is Australia’s central bank. One of its biggest roles is to decide Australia’s interest rate, taking into account economic conditions including unemployment, inflation and the housing market. The RBA interest rate has a ripple effect across the whole economy.

What Have Commonwealth Bank And ANZ Done?

The RBA decided to cut Australia’s interest rate by 0.25% today to 1.25%, to hopefully help borrowers and the economy.

It’s one thing for the RBA to cut rates, but it’s another for Australian banks to actually pass on the cut.

First out of the blocks was Australia and New Zealand Banking Group (ASX: ANZ) which said that it would cut its interest rate by 0.18%, which means it’s profiting by 0.07% from not passing on the full cut.

Australia’s Treasurer Josh Frydenberg had a number of negatives to aim at ANZ. The Australian Financial Review quoted Mr Frydenberg: “The ANZ has let down its customers.

I am very disappointed with the decision the ANZ has taken today. We heard from the royal commission that the banks were putting profits before people. As Treasurer of Australia the public has a legitimate expectation that they will see the full benefits of rate cuts as announced by the RBA.

Bank funding costs have also declined further, with money-market spreads having fully reversed the increases that took place last year.”

However Commonwealth Bank, Australia’s largest bank, decided that it would pass on the entire rate cut to its own borrowers.

This makes CBA look better to politicians and potential borrowers because the bank did what was asked of it and its loans look a bit cheaper compared to ANZ’s before today.

Banking is a tough business, that’s why I would prefer to invest in the reliable ASX shares in the free report below over owning bank shares.

[ls_content_block id=”14945″ para=”paragraphs”]

[ls_content_block id=”18380″ para=”paragraphs”]

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Skip to content