Last Thursday, BOQ booked a cash profit of $179 million for the first six months to February 29 – a 7.2 per cent rise from the same time last year. Net profit was at $171 million, thanks to strong mortgage growth.
According to BOQ CEO Jon Stutton, the rate changes are needed to balance growth, risk and margins over the long term.
"This is not a decision that was made lightly and we were very mindful of the impact on our customers even in an environment where interest rates remain at very low level," he said. "However, given the fiercely competitive market and increased funding spreads and hedging costs, these increases are necessary to help us achieve the appropriate balance between growth, asset quality, and profitability."
BOQ's interest rate hike came after APRA chairman Wayne Byres declared that they will maintain an acute focus on ensuring that banks continue to build resilience now.
"It is better we continue to invest in building resilience now when it can be done in an orderly manner from a position of relative strength than try to do so in more difficult times," Byres said during the Australian Financial Review Banking and Wealth Summit.
He also said that in order to achieve this objective, work has to be done in four broad areas – "reinforcing capital strength; improving the stability of liquidity and funding profiles; enhancing both the public and private sectors' readiness for adversity; and strengthening the risk culture within the financial system."
Collections: Mortgage News