Macquarie followed Westpac in announcing it would pass on the full 50 basis point rate rise to its customers as the big four bank stocks were smashed in early trading.
Bank stocks were smashed in early trading on Wednesday as investors worry that aggressive rate increases would lead to a spike in bad debts, higher funding costs and tougher times ahead.in announcing it would pass on the full 50 basis points increase to its customers with standard variable home loan rates, with Macquarie’s rate to become effective on June 17.
“We believe a ‘quick and aggressive’ rate cycle creates more challenges for banks than a ‘gradual and measured’ tightening cycle,” Mr Wiles said.Ahead of the RBA’s move to increase rates in May, all the major bank chief executives had expected slow and steady moves to help ease the pain for customers, as many encountered their first interest rate increases in more than a decade.
Mr Wiles said Morgan Stanley’s current forecasts assume that the major banks’ margins expand by around 10 basis points between this current half and the second half of 2024, but mortgage growth would slow to around 3 per cent next year and impairment charges would reach 19 basis points of loans by financial year 2024.
“Our NIM forecasts for the banks are predicated on a 2.25 per cent terminal rate, so today’s change doesn’t appear to have significant implications for our NIM or loan loss forecasts ,” Mr Triggs said.
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