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The Bank of Queensland (BOQ) is the first bank to reveal its hand, announcing it will reduce its standard variable home loan rate and its variable business loan rates by 35 basis points, in response to the RBA's 50 basis point reduction to the official cash rate yesterday.
BOQ chief executive officer and managing director Stuart Grimshaw said continued economic uncertainty had influenced their decision to hold back 15 basis points this month.
“Increased competition in retail term deposits continues to put upward pressure on the bank’s cost of funds," he said.
“When making decisions on rates we consider the needs of our customers and those of our shareholders. It is a difficult balancing act, but we believe passing on a 35 basis point cut is the responsible course of action this month,” he said.
The announcement follows federal treasurer Wayne Swan announcing his expectation that banks will pass on the cut.
"The banks have the capacity to pass through, given the fact that they are very profitable," he said.
"Their customers will be very, very angry with them if they do not pass through this rate cut.
"If Australians are unhappy with the approach of their bank in these circumstances, they should walk down the road and get a better deal."
BOQ will cut its standard variable rate by 35 basis points as of 11 May 2012, bringing its standard variable rate home loan to 7.11 per cent.
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