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The decision by some of the major banks not to pass on the full interest rate cut to their home loans may be having a negative impact on the satisfaction of their home loan customers, according to Roy Morgan.
The latest findings of the Roy Morgan Customer Satisfaction report on consumer banking in Australia indicated that satisfaction with the home loan customers of the big four banks in May was 71.1 per cent, well below the 76.8 per cent rating given by their non-home loan customers.
The report showed that the home loan customers of the other major banks all have much higher satisfaction than the big four and are closer to the rating given by their non-home loan customers.
ING had the highest home loan customer satisfaction with 88.9 per cent, followed by Bendigo Bank at 86.2 per cent and Suncorp, 81.0 per cent.
Commonwealth Bank was the best performer among the big four banks with a satisfaction rating of 72.5 per cent, followed by Westpac at 70.7 per cent, NAB at 70.4 per cent and ANZ at 69.6 per cent.
The satisfaction rating of home loan customers of each of the big four is well below that of their other customers. The biggest gap in satisfaction is with the CBA where the satisfaction of their home loan customers is 6.8 percentage point lower, followed by the ANZ, which was 5.2 percentage point lower; Westpac, which was 5.0 percentage point lower; and NAB, which was 2.5 percentage point lower.
Roy Morgan industry communications director Norman Morris said the recent declines in the official cash rate announced by the Reserve Bank have yet to impact home loan customer satisfaction, but in coming months these interest rate cuts have the potential to improve ratings.
“However, the high level of negative publicity surrounding the decision by some major banks not to pass on the full reduction to their home loan may negate some of the positive impact that a drop in interest would otherwise have had,” said Mr Morris.
Improving the satisfaction rating of their home loan customers so that it is closer to that of their smaller competitors will be a real challenge for the big four banks, he said.
“Improving home loan customer satisfaction among the big four will have a positive impact on their overall customer satisfaction, which is partly held back by low home loan satisfaction,” he said.
“At the same time as the banks are trying to improve the satisfaction of their home loan customers by reducing rates, they will face the problem of declining interest rates for their deposit customers who are likely to become less satisfied. Keeping both groups happy as well as shareholders, in a declining interest rate environment, presents a major challenge for banks.”