'Greedy' NAB's decision not to pass on full rate cut 'a kick in the guts': Wayne Swan

Federal Treasurer and Acting Prime Minister Wayne Swan has launched a vitriolic attack on NAB, labelling the bank “greedy” and saying it has “kicked working families in the guts” after it did not pass on the full 25-basis-point rate cut to borrowers today.

The bank will pass on 20 basis points rather than 25 basis points, blaming increased costs of funding for the decision.

“It is a greedy decision and one not justified in my view by the fundamentals,” says Swan, who before yesterday’s RBA announcement said banks would have no excuse for not passing on the full rate cut.

The attack comes despite the fact NAB has offered the lowest standard variable rate of the major banks for over two years and will continue to be the cheapest lender of the big four when it cuts its rate from 7.67% to 7.47% on Monday next week.

The five basis points the bank will not pass on to borrowers will boost its earnings by an estimated $65 million. Last week NAB announced its annual profit for the 2011 financial year was $5.2 billion.