Westpac is Australia's largest bank in terms of Market Capitalisation. Recently, Westpac slugged its customers by lifting their variable home loan interest rates by 45 basis points, even though the RBA only lifted rates by 25 basis points.
I wrote an email to Mr. Peter Hanlon, its Group Executive stating my displeasure and intentions to go elsewhere if their rates remained unjustifiably high. I suggest those that have a home loan with Westpac do something similar to put pressure on them to be fair to their customers.
Here's what I wrote:
Dear Mr Hanlon,
Thank you for your letter to us dated 4 December re: Westpac’s Recent Rate Change.
Whilst it is commendable for you to take the time to explain the bank’s excessive and in my opinion unwarranted rate hike above the RBA rate hike, I cannot but feel that the bank’s need to justify its actions appear insincere and merely justifying the unjustifiable. It is a fact that other banks have not hiked their rates as much as Westpac. It is either they are doing something right or Westpac is doing something wrong, as they face similar global conditions and funding costs as Westpac does.
I have given your letter due consideration and have read your carefully worded statements carefully but I have not been able to satisfy myself that your reasons for the excessive rate hike is legitimate or believable. For example you say “We’ve absorbed a significant amount of these extra costs, but the current conditions require us to act independently of the RBA”, yet your bank is still exceeding the market’s expectations by achieving billions of dollars worth of profit every year. Banking competition in Australia have taken a bad hit after the GFC and banks are strategizing to take advantage of this unfortunate climate to fatten their bottom lines at the expense of the hard working families, many of whom struggle to put a roof over their heads with home loan mortgages being their single biggest expense. By taking this step, Westpac has undoubtedly condemned some families to a bleak future, some may even lose their homes because of Westpac. Westpac should take the high road and be honest with their customers and admit the real reason for hiking their rates so excessively is to make more profit, at least then it would be respected for being honest.
Westpac has callously taken the Australian public for fools and I for one have had enough. I will be on the look out for a better deal if Westpac’s variable rates are not lowered and continue to remain higher than the other banks. One thing is for sure, this episode will make me wary of taking another home loan with Westpac in the future and I’m sure this is one thing you did not want to hear from a once loyal Westpac customer.
Yours Sincerely,
Damien Ng
Former Loyal customer of Westpac
Thank you for your letter to us dated 4 December re: Westpac’s Recent Rate Change.
Whilst it is commendable for you to take the time to explain the bank’s excessive and in my opinion unwarranted rate hike above the RBA rate hike, I cannot but feel that the bank’s need to justify its actions appear insincere and merely justifying the unjustifiable. It is a fact that other banks have not hiked their rates as much as Westpac. It is either they are doing something right or Westpac is doing something wrong, as they face similar global conditions and funding costs as Westpac does.
I have given your letter due consideration and have read your carefully worded statements carefully but I have not been able to satisfy myself that your reasons for the excessive rate hike is legitimate or believable. For example you say “We’ve absorbed a significant amount of these extra costs, but the current conditions require us to act independently of the RBA”, yet your bank is still exceeding the market’s expectations by achieving billions of dollars worth of profit every year. Banking competition in Australia have taken a bad hit after the GFC and banks are strategizing to take advantage of this unfortunate climate to fatten their bottom lines at the expense of the hard working families, many of whom struggle to put a roof over their heads with home loan mortgages being their single biggest expense. By taking this step, Westpac has undoubtedly condemned some families to a bleak future, some may even lose their homes because of Westpac. Westpac should take the high road and be honest with their customers and admit the real reason for hiking their rates so excessively is to make more profit, at least then it would be respected for being honest.
Westpac has callously taken the Australian public for fools and I for one have had enough. I will be on the look out for a better deal if Westpac’s variable rates are not lowered and continue to remain higher than the other banks. One thing is for sure, this episode will make me wary of taking another home loan with Westpac in the future and I’m sure this is one thing you did not want to hear from a once loyal Westpac customer.
Yours Sincerely,
Damien Ng
Former Loyal customer of Westpac
