Aussie banks gouging billions on interest rates

New evidence has emerged that Australian banks are using the financial crisis as cover for charging borrowers more than their cost increases.

The Sydney Morning Herald analysed Australian Reserve Bank figures to find out how much borrowers are contributing towards bank profits – and revealed that someone with a three-year fixed rate home loan of A$300,000 pays a personal contribution to growing bank profits of between A$75 and $125. Overall, the increase in costs to banks was more than offset by interest rate increases.

Consumer advocacy spokesperson from Choice, Christopher Zinn said “It’s well documented that the large banks profited in various ways from the financial downturn, including taking market share from smaller competitors, and increasing their lending profit margins.”

This analysis is consistent with the multi-party banking inquiry held in New Zealand which concluded that the benefit of official cash rate reductions had not been fully passed on to customers.

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