Billions In Profits...
Nov 24, 2023
Big banks in Australia hit the jackpot in the 2022-2023 financial year, raking in staggering profits surpassing the previous year.
Let’s take a look:
Commbank: $10.2b (up 6%), NAB: $7.7b (up 9%), ANZ: $7.4b (up 14%) and Westpac: $7.4b (up 12%)
CommBank, NAB, ANZ, and Westpac collectively pulled in over $32 billion. Now, why are they swimming in cash?
Since May 2022, the Reserve Bank of Australia jacked up interest rates to curb borrowing and spending. The idea was to rein in inflation.
When they talk about "raising interest rates," it means the RBA is making borrowing pricier for banks.
The catch?
They hoped the banks would share this burden with customers. Spoiler alert: they didn't.
Banks, especially the big four, were quick to raise rates for borrowers but weren't as enthusiastic about boosting rates for savers. Why?
Because banks profit from charging borrowers more interest while paying savers less.
Sneaky move, right?
Now, here's the kicker: the big four banks widened the gap between borrowing and saving rates. In simple terms, they made over $7 billion each in extra 'net interest income.'
Translation: money earned from borrowers minus what they paid out to savers.
Feeling shortchanged? It's time to explore other options.
All you need to do, check your interest rates and compare them to rates found on comparison sites (e.g. Canstar, Finder).
Don't let the big banks dictate the game—find alternatives that work for you.