NZ-owned SBS is coming out strong against the so-called big five banks.
After a week of merely playing catch-up, starting with ANZ lowering their two-year rate to 3.45% and the rest of the big banks matching them, finally, we see a bank who's ready to take the bull by the horns.
As we're heading further into Spring and with the Auckland property market increasing, SBS has come out with an outstanding two-year rate of 3.39%. Even with the low OCR, there are clearly margins available from the Australian banks. However, profitability seems just too critical with the new capital requirement set by APRA for subsidiaries across the ditch.
Will the big banks match these low rates? I think we'll see them lowering their two-year rate, but we won't see them match as low as 3.39%. The big banks will likely wait to see if SBS has the human resource and capacity to take on new business. Like TSB have done in the past, they will likely get overwhelmed by the number of inquiries and applications and be forced to take a step back without the right resource in place to handle the increased volume. Can they hang on long enough to become a game-changer and push the big banks to follow suit?