MAKING NEWS

Tue, 27 July 2010
Rate rises unlikely to top official move: Citi By finance reporter Lexi Metherell
Citibank Australia's chief executive says it is unlikely his bank would have to lift its mortgage rates by more than an official rate rise, if there is one next week.

The Reserve Bank is tipped to lift the official cash rate to 4.75 per cent if tomorrow's inflation figures show cost of living pressures are rising by more than the RBA expects.

Roy Gori says he would not rule out lifting rates by more than any official increase, but it is unlikely.

"Key to our proposition is to make sure that we're competitive, so while we'll look at what happens from an RBA perspective, we'll also have a keen eye on what our competitors do," he said.

"At the forefront of our thinking is making sure we have products and pricing which is competitive and that is offering value to customers."

Mr Gori says Citibank would also be unlikely to lift rates by more than any official increase because the cost of funding its loans is easing.

"In the crisis we saw costs of that money go up quite dramatically, and as a result a lot of players exited the market. The result of that obviously was a lot of concentration of the mortgage market into the big four," he added.

"We're seeing that that's now starting to turn a little bit, we're seeing the funding costs start to come down."

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