CBA shares, which fell as much as 0.5% earlier in the day, reversed losses and ended 0.3% higher.
CBA said in a statement it cut the variable mortgage rate for new borrowers with a 20% deposit by 25 basis points to 6.89%, while those with larger deposits will see a 20 basis point reduction, effective immediately.
“Perhaps the move to ease rates on the lending side is a way to try and show some balance from the banks point of view,” said Tim Waterer, market analyst at KCM Trade.
Since the beginning of the year Australian banks have been in a race to sell mortgages and deposits which have squeezed margins.
The rate cuts come even as federal treasurer Jim Chalmers and Labor MP Jerome Laxale have expressed their wish to refer Aussie banks to the country’s competition watchdog to investigate the interest rates that banks are offering to savers, amid decade-high interest rates and inflation above the central bank’s target range.
ANZ cut deposit rates by 80 basis points whereas CBA cut by up to 50 basis points according to the report.
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Reporting by Rishav Chatterjee in Bengaluru; Editing by Varun H K and Nivedita Bhattacharjee
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