Banks put profits ahead of customers

Date: 13 August 2008

Australia's banks are selfishly putting their profits ahead of their customers who are under financial pressure from high interest rates.

There have been big profits recorded by the Commonwealth Bank (up 7% to $4.8 billion) and Bendigo and Adelaide Bank (net profit up 40%), plus rosy outlooks from Westpac and St George.

This shows that despite the global credit squeeze, banks have been safeguarding their profits rather than reducing margins for customers.

The ACTU is also concerned that banks are continuing to push vulnerable families into higher levels of debt, with recent media reports that Commonwealth, NAB, Westpac, ANZ and St George are all continuing to offer 100% housing loans (less mortgage insurance) despite evidence that house prices are falling.

The ACTU has previously warned that the banks' employment practices had led to a sales-driven culture that has caused loans to be made to families that cannot afford them.

ACTU President Sharan Burrow said banks had managed to protect their bottom lines and could afford to ease the pressure on working families and small business.

Commercial banks have lifted their interest rates four times independently of the Reserve Bank this year, adding an extra $100 a fortnight to the costs of servicing a typical home loan.

"Additional interest rate rises on top the Reserve Bank have been proven to be more about profit gouging than about a serious downturn in the banking sector," Ms Burrow said.

"If working families can't pay their mortgages, can't manage the family budget then the economy suffers and even banks and their shareholders don't win in the long term.

"The banks must pass on the full reduction in interest rates from any future Reserve Bank decision to ease monetary policy."

For further information

Contact:	Mark Phillips
Union:	ACTU
Phone:	03 8676 7266
Contact Mobile:	0422 009 011
WWW:	http://www.actu.asn.au/

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