Westpac Banking Corporation Ltd
(ASX:WBC) CEO Gail Kelly says the company is under financial pressure to raise interest rates.
The Sydney Morning Herald reports that Mrs Kelly has told shareholders that the bank’s reliance on expensive offshore sources to fund its lending is expected to result in costs rising by between 30 and 40 basis points from current levels.
But Mrs Kelly admitted that delivering further rate rises on home mortgages to recover the costs would be difficult during an election year.
Her comments will add to speculation that the four big banks could again impose rate hikes on customers if the Reserve Bank opts for more rises in official rates this year.
In December, Westpac lifted rates by 45 basis points - nearly twice the central bank’s official December rate rise of a quarter of a per cent - and blamed higher funding costs for its decision.
For the 12 months to September 30, 2009, Westpac reported a profit of $3.446 billion.
