Macquarie Bank rates up 0.7%

[alexlee]

It is then obvious they are trying to rip off the last few remaining customers they have before they shut down shop. looks like it is time for us customers to leave also...last person turn off the lights.

Market forces at its finest, really. Companies goes into a market when profits can be made, and leave when they perceive they can no longer make a profit. Why expect a profit-driven company to have morals?

Though I have to admit, I love the banks as an industry. I get paid well by a bank, banks are willing to lend me money (I look at my loan balance and am really surprised anyone would lend me that much), and I make money from bank shares.
Alex

 

[MPmelb]

Maybe I've got a conscience, but I just think it's a bit rich to rich to rip off customers like this, esp. when circumstances are already difficult.

petrol up, grocery up, mortgage up, rents up, utilities up, cost of living up.

these banks make billions of dollars profit, and this ceo gets $33 million. When is it enough?????

That's the question for our society - when is it enough???? Till they've wiped out the mortgage belt & squeezed every bit out of people.

If there was a bank with a conscience that undercut them, they would get the business.

 

[alexlee]

Maybe I've got a conscience, but I just think it's a bit rich to rich to rip off customers like this, esp. when circumstances are already difficult.

petrol up, grocery up, mortgage up, rents up, utilities up, cost of living up.

these banks make billions of dollars profit, and this ceo gets $33 million. When is it enough?????

That's the question for our society - when is it enough???? Till they've wiped out the mortgage belt & squeezed every bit out of people.

If there was a bank with a conscience that undercut them, they would get the business.

A bank with a conscience wouldn't be ABLE To undercut them. However, another company willing to make lower profits because they're private or whatever may. The banks make much fatter profit margins before deregulation. Then along came Aussie and Wizard and so on and drove their margins right down. They didn't come in because they were moral: they saw a profitable market and got a slice of the pie. At the moment, EVERY institution is increasing rates. That's because the whole market is shifting, unless you assume EVERY mortgage lender is in it together.

You may not like that but that's how it is. As for what is enough.... that's a question you ask but not everyone does. That may explain why it's happening.

Wipe out the mortgage belt? Sounds good for us as investors, don't you think? Who wants to own a couple of mortgage belt suburbs? Seriously, people who bought in prior years are still laughing their heads off. Prices went up because banks lent out a lot of money. The only real way to avoid a bust: don't have the boom in the first place. Go ask people who made money in property in the late 90s whether they would give up their gains to help people who bought (at foolish prices) in the last couple of years. Would you sell your property at 20% below market to benefit a first home buyer? I wouldn't, but then I don't have a conscience.
Alex

 

[steveadl]

Let's do a little example of a XYZ bank (because off hand I don't know an exact profit vs customer figure for a bank) - similar to one of our majors:

XYZ Bank last year made a net profit of $5billion
XYZ bank has 5 million customers Aust. wide

XYZ Bank made $1k profit per customer they had last year.

hmmmmmm I make more profit than that on some of my customers per year - does that mean I'm evil?

Remember - banks lose money on a LOT of their customers.

 

[alexlee]

I'm not sympathetic to banks if they lose money on some customers either. Nor am I sympathetic if customers walk and refinance. It's all just business.

Do any investors charge less rent because we have a moral obligation to? Sell our properties for less than what we can get them for? Buy for less than?

The media always likes to apply emotions and morals to property investors too. When we raise rents it's because we enjoy doing it. When we kick tenants out it's because we find it fun. Seriously, I don't care about my tenants one way or another. They do their part, I do mine. We're not friends, and we're not enemies. I think it makes tenants feel better if they think landlords actually have positive or negative feelings towards them. Nicer than the truth: landlords really don't care at all.
Alex

 

[Qlds007]

MP Melb

Wow ok all noted.

Full doc or lodoc you would probably looking at 8.6% -8.7% something like that. Could go to 80% if you need extra funds.

 

[Dis]

The point is the banks already make enough money without having to rape customers who help make them the money. It's called a degree of morality.

I guess with the great capital gains you have made over the last few years you wont be raising rents and "raping" your tenants. You surely must have made enough money already. Passing on your funding costs to people who can least afford them is just mean.

 

[Mofra]

It is then obvious they are trying to rip off the last few remaining customers they have before they shut down shop. looks like it is time for us customers to leave also...last person turn off the lights.

They are still the largest securitiser by volume in Australia.
To be fair, I think most of your anger is a direct result of a lack of understanding of the lending & securitisation process in Australia. Why should any company have an obligation to make a loss on a transaction? If your argument is with capitalism itself, why have you borrowed to invest

 

[yieldmatters]

I don't like the banks as such, but I've benefited as a customer and a shareholder, so why should I bite the hand that feeds me (twice over)?
Alex

Three times over wouldn't it. Customer, Shareholder, Employee ! Banks are your friend!

I don't mind the banks - I think they are stupid sometimes with regards to risk but I think they generally behave in a fairly balanced way (shareholders, customers, society).

 

[chilliaa]

The banks were still making good profits even after factoring in 0.7% discounts, and low docs.

The point is the banks already make enough money without having to rape customers who help make them the money. It's called a degree of morality.

I suppose you will argue that morality and business profits don't mix, but when you are "considered" a pillar of a good society like banks are, then they should keep that in mind.

Anyway, If they don't want my business, I'm happy to go to a lender who will respect it.

Its not called degree of moriality, its called corporate survival. In this market you dont look at the reserve banks 'official' interest rate, you look at the 'market' interest rate such as the 90 day bank bill rate, this is around 1% more expensive than the reserve bank rate.

When things were good, you werent showing any loyalty to the mainstream banks, you were shopping round for the best rate (im not blaming you for this). Now the tide is turning at the weakest members are exiting the lending market.
I mentioned in a previous post, residential lending is not a core business opperation of macquarie, thats why its happy to exit. If you want to remain a customer 'fine' but you will have to pay their rates.
I think macquire is 'politely' giving you the nudge. Macquarie cant very well tell existing customers get lost we are out of here. So they bump up the rates to 'encourage' borrowers to go else where.

 

[chilliaa]

And if enough people behave like you and switch lenders, the banks will drop their rates. Assuming, of course, that ANY lender can afford to NOT increase rates.
Alex[/QUOTE]

This is not going to be happening in this market, margin rates were already very competitive (in fact they were at 10 year lows). With increased risks lending institutions are going to be INCREASING margins.

 

[alexlee]

Its not called degree of moriality, its called corporate survival. In this market you dont look at the reserve banks 'official' interest rate, you look at the 'market' interest rate such as the 90 day bank bill rate, this is around 1% more expensive than the reserve bank rate.

During the 'good' times the institutions also didn't look at the official rate. That's why anyone and his dog could get a 0.7% discount. Arguably, given that securitisation is so prevalent, the RBA rate is much less important in determining the mortgage rate.
Alex