ANZ overcame the timidity of its initial foray into price leadership in the home loan segment on Friday, with a rise of six basis points in its variable rate home loans and business loans. The higher rates are effective from the end of this week.
The bank noted in its announcement of the rate rise that "increased competition for deposits, particularly term deposits, is currently the most significant driver of rising funding costs."
ANZ also said that the replacement of less expensive term wholesale debt is continuing to push up the average cost of wholesale funding.
When ANZ lifted interest rates in the first of its monthly reviews, in February, the bank was timid, lifting rates by only six basis points and even then only after squibbing the opportunity to do so in February.
ANZ's grateful followers moved by between nine and 15 basis points, with Bendigo and Adelaide Bank lifting rates to the high end of the range.
National Australia Bank, which lifted variable home-loan rates by nine basis points in February, is now the laggard in the present pricing cycle.
Some lenders that have already moved rates are also talking about lifting interest rates once more, with ANZ's planned rise one excuse along with their own rise in funding costs. The
Financial Review today quotes executives from Suncorp Bank and Bendigo hinting at a further lift in rates.