Rate rise reconsidered by St George

St George Bank may be reconsidering its position on an increase in the standard variable, independent of any rise in the cash rate, but in line with elevated funding costs in the short-term market.

At the bank's annual meeting in Sydney yesterday chief executive Paul Fegan said: "There is a prolonged level of higher costs of wholesale term money as the supply of funding remains tight.

"The longer this continues the more upward pressure will be applied to interest rates. We will continue to monitor the market in this regard as to future movements."

This might be read as meaning St George wants to and plans to lift interest rates on home loans.

Fegan had said at the bank's profit briefing at the end of October that the bank's approach was to stay in step with changes in the cash rate.

Meanwhile St George reiterated its profit forecast for the year at 10 per cent earnings per share growth in the year to 30 September.