Which banks pass on OCR changes first?
New data from New Zealand's Financial Markets Authority reveals significant disparities in how quickly different banks pass on Official Cash Rate (OCR) changes to customers. While some banks adjust savings and mortgage rates rapidly, others are slower, leading to questions about transparency and profit margins.
Why it matters
Understanding bank behavior regarding interest rate pass-throughs helps consumers make informed financial decisions and highlights the impact of monetary policy on personal finance.
Some banks are quicker to pass on official cash rate movements to borrowers and savers than others, new data from the Financial Markets Authority shows.
It said it had requested information from eight financial institutions, providing 98 percent of housing loans in New Zealand, about how their products had moved.
The intention was to improve transparency about the pace at which banks passed through OCR movements to borrowers and savers .
The data shows that while the OCR was falling last year, Kiwibank passed on 100 percent of the cuts to on-call savings accounts, and quite quickly. TSB was close behind, passing through about 95 percent. ANZ passed on 30 percent, Westpac 50 percent and The Co-Operative Bank 58 percent. ASB passed on 62 percent.
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