Westpac is still trying to justify its recent increase to home loan rates, after it was slammed for almost doubling the interest rate rise set down by the Reserve Bank at the beginning of the month.
Speaking at the bank’s annual general meeting today, Westpac chairman Ted Evans said that the lender had already absorbed some of the rising costs of funding.
“We absorbed some of the external cost increases, rather than pass them on to borrowers at the expense, of course, of shareholders,” he said.
“With interest rates now clearly on the rise again, both at home and abroad, there are limits to how long we could continue to absorb these costs,” he added.
This comes after the minutes of the Reserve Bank’s December board meeting were released, revealing that interest rates were raised for a third straight month in December because the central bank deemed that they were “too low for an economy that had resumed expanding”.
Evans said Westpac would “do no favours to anyone by offering mortgages at rates that we know to be unsustainable.”