Australia’s big four banks continue to manage multiple challenges including falling house prices, a regulatory backlash sparked by the royal commission, and higher funding costs.
A further challenge is that international funding costs have been creeping up in recent months – a trend likely to cost banks hundreds of millions if they are not passed on to customers.
Issues raised by the royal commission will make it much harder for major banks to raise their interest rates independently of the Reserve Bank. At some stage, however, an economic decision will need to be made.
How are you placed should interest rates rise sooner rather than later?