7 May 2009

Bank responds to complaints about rates

5:51 am on 7 May 2009

Westpac has responded to complaints by Auckland businesses that interest rates are excessive, saying it's important the sector stays solid during the economic downturn.

The Auckland Chamber of Commerce canvassed 500 mainly small to medium enterprises: 80% said bank support was lacking, particularly considering their overdrafts are secured by a residential property.

Chief executive Michael Barnett, agrees some interest rates are excessive, given the security offered and a further cut in the Official Cash Rate on 30 April from 3% to 2.5%.

Westpac business banking general manager Ian Blair says it's a tough climate for business owners.

But he says one of the reasons New Zealand's economy is remaining relatively strong is that banks are acting prudently.

However, the chamber says some interest rates of up to 20% on overdrafts, which are already secured by residential property, are unhelpful.