Westpac’s chief executive Gail Kelly has said the major’s latest rate rise was necessary despite its unpopularity.
Speaking at the bank’s annual general meeting yesterday, Ms Kelly said the decision was correct and she warned that interest rates were likely to move even higher next year.
“I think we’re likely to see some increases in rates next year, but I think they’ll be done very carefully and very thoughtfully,” she said.
Ms Kelly said she had expected to receive a backlash from the public when the bank moved its rates 20 basis points above the RBA rate rise, but the move was necessary in order to deal with the rising costs of funding.
“Our average cost of funding continues to go up, and we expect that to be the case actually for some period into the future,” she said.
Ms Kelly said the bank had managed to grow its lending book by 8 per cent.