Date: May 02 2012
ANZ chief executive Mike Smith said this week's 50 basis point cut by the Reserve Bank will help get the economy moving, but is unlikely to address the real problem of a lack of consumer and business confidence.
The banking boss also suggested the political strains in Canberra were weighing on business, declaring "we need some real stability and consistency" to create confidence.
"Hopefully there will be some stimulation (to the economy) as a result, but is it going to dramatically change things? No I don't think so," he said of the cut.
His comments came as ANZ handed down a record first-half profit of $2.973 billion.
Even with concerns over the outlook for economic confidence, Mr Smith suggested ANZ may not pass on the full RBA cash rate cut to mortgage customers, saying his bank was prepared to make "tough decisions" on managing interest margins.
He said structural change was occuring in terms of rising deposit costs, while term funding costs remain elevated.
ANZ remained committed to deciding interest rate pricing outside of the RBA cash rate process, he added. This was unlikely to see ANZ make a decision on interest rates until late next week.
Mr Smith said parts of the economy outside the resources sector were struggling. He also noted many resource projects were being put on hold which was being felt through the economy.
This material is subject to copyright and any unauthorised use, copying or mirroring is prohibited.
[ Canberra Times | Text-only index]