Bendigo Bank yesterday announced that it will increase its residential investment standard variable interest rate by 20 basis points to address recent industry-wide concerns regarding residential investment lending.
Bendigo and Adelaide Bank managing director Mike Hirst said implementing this measure supports the lender’s prudent management by appropriately pricing for risk and assists restraining investor mortgage book growth to less than 10 per cent per month as required by APRA.
“When it comes to setting interest rates, our bank takes into account a wide range of factors and carefully considers its key stakeholders including borrowers, depositors, staff, shareholders, partners and the wider community,” Mr Hirst said.
“We believe this approach considers the needs of our stakeholders while continuing to provide customers with market competitive rates.”
The adjustment is effective 1 September for new business and 1 October for existing residential investment loans.
The regional lender announced its full-year results earlier this month and confirmed that its investor loan growth had not hit APRA’s 10 per cent cap.
“We’ve been growing below system in that space,” Bendigo and Adelaide Bank chief financial officer Richard Fennell said at the time.
“We will look to monitor very closely what happens from a volume perspective to make sure we stay below the 10 per cent and if we need to increase our price in that space to stay below the 10 per cent then we’ll do that and obviously that would have a positive impact,” he said.
“But what we would prefer to do right now is sit back and watch to see how things settle and see if this gives us an opportunity to get back more towards system growth rates in our investor mortgages.”
The latest APRA figures show Bendigo and Adelaide Bank’s investor loan book at $11.12 billion, a 7.81 per cent increase over 12 months and safely below the regulator’s 10 per cent threshold.