Everytime I see an advertisement about a bank telling you that it’s all about community and giving back to the people, I call it a marketing bullshit. When did a bank really care about people? Is there any corporates which really do?
The Reserve Bank of Australia (RBA) has indicated that the official cash rate will be slashed by 0.25 basis point from the current 12 year high of 7.25%. So what did the top banks in Australia did in response?
Number 1 priority – Cut savings rate
ANZ has cut its savings rates by up to 0.55 per cent per cent, Commonwealth Bank by up to 0.40 per cent, St George by 0.28 per cent and Westpac by up to 0.30 per cent.
Strategy 101 – Raising rates on credit cards
NAB increased credit card rates by up to 0.50 per cent last month, the same as ANZ, while Commonwealth Bank increased rates by up to 0.24 per cent in June. Westpac added 0.54 per cent to three of its credit cards, taking the rates to as high as 19.45 per cent in August.
Bullshitting 202 – High cost of funding
OK, I’m not an accountant or economist. So I’ll let you decide whether that’s an excuse or a fact.
The Art of Acting and Pretending
If you get financing from the banks, all your houses and businesses belongs to the banks. Yup, there’s nothing wrong with that. But banks are reluctant to lower the interest rates for loans and mortgages even if the government says that they should and when RBA is even lowering their official cash rate.
So, you tell me. Why shouldn’t I yawn whenever I see an advertisement of the banks? They are in it for the money, can’t you see it? People always come next. It always is and will always be. Do we still need them? Erm… yes.
However, shareholders of the banks will probably love these tactics as they can get more returns (value, growth, dividends etc) if the banks have more positives and zeros to show at the end of their balance sheet.