Friday, April 25, 2008

Another rise in rates likely, says bank

Interest rates may rise again, because it has become more expensive in recent months for banks to borrow money overseas, says ANZ National chief executive Graham Hodges.

"My sense is that there is still some possibility of a further increase in [lending and deposit] rates this year. It could be another 10 to 25 basis points," Mr Hodges said yesterday.

He added that ANZ National was now demanding that borrowers have a higher uncommitted monthly income after making their mortgage payment. The bank wanted people to have more free cash because costs were rising in areas such food, power, petrol and rates.

The bank's total provision for bad loans jumped from $30 million last year to $93 million at the end of March.

As far as I am concerned - as a lender to the bank rather than a borrower from it - rates can never be too high.

No comments: