Westpac damage control goes bananas
Following its response to the Reserve Bank’s rate rise by posting its own rise of 45 basis points, Westpac Bank has come under fire for sending its customers a video email comparing the rise to buying banana smoothies.
The video explained that the bank’s decision to raise its rates so high was akin to a crisis in banana availability due to bad storms, meaning banana smoothies would be more expensive. It went on to explain that the situation was similar to banks and the global financial crisis.
The comparison has drawn criticism from consumer groups, the ACCC and from prime minister Kevin Rudd.
Westpac’s chief executive Grace Kelly defended the bank’s approach by asserting that everyone would be paying higher rates and that politicians know this is the case.
“I think the politicians really do understand this new environment. They can see the evidence before them that funding costs have gone up materially,” said Kelly.
Consumers have lashed out at the bank’s rise and its attempt to placate customers with the video.