Thursday, February 16, 2012

Commonwealth Bank boss holds out hope of lending rate cut if global conditions improve.

The chief executive of the Commonwealth Bank has held out the possibility of an independent cut to its lending rates if global financial conditions improve.

Ian Narev, who succeeded Ralph Norris as the CBA's boss late last year, says the bank will cut rates if funding conditions are "appropriate" but warned that any move in the short term was unlikely.

Listen to my interview with Mr Narev broadcast on this morning's edition of AM.

Here's the story on ABC News Online.

Australia's biggest home lender yesterday announced a 19 per cent rise in first half profit to $3.62 billion as the political debate about independent rate increases continued to flare.

Mr Narev told AM, however, that if conditions such as funding costs on global markets improved he would consider giving borrowers relief with a cut to lending rates.

"We certainly would consider that, I mean we're in a competitive market and therefore fundamentally we're making an assessment of both the competitive dynamic and the funding costs and in the appropriate circumstances we certainly would be willing to cut our rates," Mr Narev said.

But Mr Narev responded cautiously when pressed on when any cut could come and he ruled out a move the coming year.

"I can't see it coming, quite candidly, in the near future, but I've said a number of times that even the near future is difficult to predict so we really can't rule anything out," he said.

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