Popularity contest sparks rate cut promise

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The major banks could lower rates on standard variable loans in an effort to win customers and boost market share.

Banking experts have indicated that the country’s major lenders are considering reducing variable mortgage rates slightly in the coming months, should the cost of funding stay at current levels.

The comments echo a statement made in March by Westpac CEO Gail Kelly. She told ABC television that the bank would lower rates independently of the Reserve Bank when funding costs fall towards the end of 2012.
A rate cut would go a long way in currying favour among borrowers.
Recently released figures from the February 2011 Banking Customer Satisfaction Report from Roy Morgan Research show all four banks’ received weaker satisfaction ratings from their customers since the November rate rise.
Banks raised rates outside of the RBA upwards of 0.45% in November sparking outcry from both the government and the public.
Satisfaction among CBA customers slipped 8.7% between October and February, while the other three major banks experienced declines of less than 2 percentage points. 
Banking experts indicate one or more the major banks could try to gain market share by using the plateau in funding costs to cut mortgage rates.
A potential rate cut however is dependent on the cost of funding and RBA movements.
The RBA is expected to leave the official cash rate on hold during the first half of 2011, despite recent figures which indicated surprisingly low unemployment.

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