MELBOURNE (Dow Jones)–Westpac Banking Corp. (WBC.AU) said Tuesday it will increase its standard variable home lending rate by 45 basis points, well above the Reserve Bank of Australia’s 25 basis point boost to the official cash rate, because of higher wholesale funding costs.
Sydney-based Westpac’s standard variable home lending rate will now stand at 6.76% a year, it said in a statement.
The lender’s business loan rates will rise by 25 basis points, Westpac said.
Both rate changes are effective Friday, it said.
The interest rate changes reflect the continuing cost pressures Westpac is experiencing in wholesale funding markets as well as last month’s increase in the official cash rate, said Peter Hanlon, group executive retail and business banking.
“Both components, along with the higher rates we are paying on customer deposits, contribute to our increasing average funding costs,” he said.
Hanlon said Westpac’s average wholesale term funding costs are around 80% higher than a year ago.
-By Andrew Harrison, Dow Jones Newswires; 61-3-9292-2095; andrew.harrison@dowjones.com
