ANZ slaps homeowners with rate hike

ANZ has slapped homeowners with more mortgage pain after the bank lifted its variable mortgage interest rates to nearly 9.5 per cent.

ANZ slaps homeowners with rate hike

ANZ has slapped homeowners with more mortgage pain after the bank lifted its variable mortgage interest rates by 10 basis points to nearly 9.5 per cent.

The rises, which takes effect on Monday, affect its standard variable home loan rate which will increase to 9.47 per cent a year.

ANZ, which yesterday reported a 7 per cent fall in first half earnings, said the rise was due to sustained higher funding costs on the back of turmoil in global credit markets.

"We have worked hard to absorb increases in wholesale rates in the last several weeks, however the pressure has been sustained and given this we have had to pass some of the higher cost on to customers," ANZ managing director, personal, Brian Hartzer said.

Yesterday the nation's fourth largest lender posted a 7 per cent decline in first half profit, broadly in line with analysts' expectations.

Net profit was $1.963 billion for the half year to March 31.

Cash profit, which strips out non-core and one-off items, fell 14 per cent to $1.674 billion.

Analysts had already factored in a big slide in first-half earnings following previous disclosures by Mr Smith that the bank would take a $980 million provisioning charge for bad and doubtful debts.

Provisioning increased by almost 200 per cent, thereby countering the impact of revenue gains in personal lending businesses and the Asian operations.

"While the bottom line is not what we would like due to the higher provisioning charge, we are still delivering on our five-year growth plan," Mr Smith said.

"We are getting good traction on our strategy, particularly in Asia Pacific."

Spurred by recent acquisitions, the Asia Pacific division was the star performer after it generated a 47 per cent rise in net profit to $182 million.

Mr Smith signalled a major attack on costs in the current half which would involve the migration of more jobs and business functions to the group's IT and back office service centre in India.

With AAP and the Herald Sun