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Highlights:
- Reserve Bank of Australia lifted its cash rate yesterday by 0.5bps, making it 1.35%.
- CBA and ANZ Bank have indicated an increase in their variable interest rates following the RBA’s cash rate hike.
The much-awaited cash rate hike was announced yesterday by Reserve bank of Australia, lifting the official interest rate third time in a month to make it 1.35%. The 0.5bps cash rate hike means a definite hike in borrowing rates if fully passed on by banks. Notably, today the first among Aussie big four banks to lift rates is the Commonwealth Bank of Australia (CBA). Following its lead, ANZ bank also announced to raise its variable interest rates.
Meanwhile on the ASX, the big four banks managed to book profits today after ending the sessions in red yesterday.
In this backdrop, we discuss the stock performance of Commonwealth Bank of Australia (ASX:CBA), New Zealand Banking Group Ltd (ASX:ANZ), National Australia Bank Ltd (ASX:NAB), and Westpac Banking Corporation (ASX:WBC).
Commonwealth Bank of Australia (ASX:CBA)
The first bank to announce a follow-on rate hike is Commonwealth Bank of Australia. CBA will be increasing its standard variable home loan rates up, by the same 0.5 percentage points. Reportedly, selected deposit rates will also rise , and the full rate increase will be only passed on to select depositors. Investors are speculating all other big four banks to follow CBA’s lead.
Meanwhile on ASX, CBA shares closed trade at AU$92.000 apiece, up 0.844%.
Australia and New Zealand Banking Group Ltd (ASX:ANZ)
Another big four bank that is creating headlines for hiking its rates is, Australia and New Zealand Banking Group Limited. As per media reports, ANZ will be offering higher interests on few term deposits from mid-July. It is likely to change its home loan rates around the same time. While the new rates haven’t become effective yet, the news has sparked investor’s interest towards the banker’s shares. ANZ share price ended up 0.900% at AU$22.400 apiece today.
National Australia Bank Ltd (ASX:NAB)
NAB share price gained 1.808% to close today’s trade at AU$28.150 apiece. This was in lack of any price sensitive announcements by NAB. The company has only been updating investors with its daily buy-back notifications in the recent past. However, since yesterday investors seem focused on determining the impact of RBA’s cash rate decision on bank’s stock performance.
Westpac Banking Corporation (ASX:WBC)
WBC share price closed 0.915% higher at AU$19.850 per share. According to a Canstar report, Westpac has been amongst the highest interest providers on savings accounts. However, unlike its peers, WBC has not yet made any announcements for a further increase in interest. It has not even raised its home loan rates.
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