AAP

Westpac says it will announce its decision on interest rates on Friday, after Commonwealth Bank of Australia (CBA) joined National Australia Bank (NAB) in passing on less than the central bank's rate cut.

CBA on Thursday announced a cut of 0.4 per cent in its standard variable home loan rate, to 7.01 per cent, effective from May 11.

The decision came two days after the Reserve Bank of Australia announced a surprise 0.5 per cent cut to the cash rate.

NAB on Wednesday said it would cut its standard variable home loan rate by 0.32 per cent to 6.99 per cent.

Westpac chief executive Gail Kelly said she would make an announcement on rates on Friday.

The bank on Thursday reported a first half net profit of $2.97 billion, and Ms Kelly said it was important to spend the day explaining Westpac's performance to consumers, analysts and investors.

But Ms Kelly indicated Westpac was unlikely to make a cut of 0.5 per cent.

"The Reserve Bank overnight cash rate is one factor," she told reporters.

"Probably the biggest factor overall is the price of retail deposits."

Westpac's result showed a fall in its margins due to the rising cost of attracting deposits from consumers and businesses.

CBA did not say whether its rate cut would apply to business loans, or affect its deposit and credit card accounts.

"In making this decision, the group has continued to balance the interests of its 1.8 million home loan borrowers with those of its 11 million depositors, and those of its shareholders, who include 800,000 Australians who own its shares directly, and millions more Australians who own shares through pension funds," the bank said.

In addition to its cut to lending rates, NAB cut the interest rate for its online savings account iSaver by 0.5 per cent.

ANZ will make its decision on interest rates on May 11.