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ANZ National needs to justify interest rate rises

28 February 2008
For immediate release

ANZ National needs to justify interest rate rises

The banks workers union Finsec is calling on ANZ National bank to provide better justifications for yesterday’s decision to raise mortgage interest rates. ANZ National blames the rise in interest rates on the cost and availability of international credit in the fallout of the sub prime mortgage crisis.

“Irresponsible lending by overseas banks led to the sub-prime crisis and now New Zealand banks are making customers here carry the cost of the fallout. That is both unfair on individual households and bad for the wider economy,” said Finsec Campaigns Director Andrew Campbell.

“Earlier this week ANZ National bank posted a three month profit of $310 million dollars and in the last full financial year made a profit of over $1 billion. In contrast New Zealand households are carrying more debt than ever before. ANZ National is pushing their costs on to debt laden households who can ill afford more costs,” said Campbell.

“We think customers and the community deserve a fuller explanation for such a major decision, especially given the Reserve Bank has not increased the Official Cash Rate this year. In the interest of public accountability we ask ANZ National the following questions:

1. Who is better placed to carry the additional cost of overseas credit. A bank that is likely to make a billion dollars in profit or indebted customers?
2. What would be the dollar cost on ANZ National’s projected profit of holding interest rates at their current levels?
3. How much of the additional revenue earned through the interest rate rise will be repatriated to the banks parent company ANZ Australia?

“The Commonwealth Bank in Australia recently raised interest rates above the increase in the OCR and were condemned by Government Treasurer Wayne Swan. Swan said the Commonwealth Bank had a lot of explaining to do to customers. We echo Treasurer Swan’s comments and call on ANZ National to do some more explaining,” said Campbell.

ENDS

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