Australian banking chief says fierce home loan price war

But the factors that helped banks insulate them from overseas troubles – reliance on mortgages and retail deposits – may now hurt profitability, The heads of Australia’s largest and third-largest banks and other banking executives spoke at a summit in Sydney as competition for loans and deposits intensified. “This is the most competitive mortgage market I’ve ever seen in my career,” Westpac CEO Peter King , he at 43, said at the Australian Financial Review Banking Summit.

Approx AUD 10 billion dollars ( Billions) of fixed-rate loans due this year, customers Cautious about switching to pricier products, better deals are being bought, the bank said.

Richard Burton, managing director of mortgages at Westpac, said the bank was offering $3 to potential customers, Cash, he said, is a common practice across the industry.

On the other side of the balance sheet, competition for deposits is underway as banks seek to shore up funding after a period in which banks have benefited from rising lending rates faster than deposit rates Heat up.

The watchdog noted that in February, the competition watchdog launched an investigation into savings rates.

“There’s a very real discussion about the lag in passing on rising interest rates to depositors,” Assistant Treasurer Stephen Jones said at at the summit.

The aftershocks of the overseas banking crisis are also raising wholesale funding costs at a time when major banks need to refinance hundreds of billions of dollars in debt. Macquarie research published earlier this month suggested that the additional cost was around 8 to The basis for the next three years.

Commonwealth Bank CEO Matt Comyn at the Pressures in funding markets “will raise the intensity around deposits” and could lead to divergent outcome pricing decisions, the summit said.

(1 USD=1.52 AUD)