An analysis has revealed that the major banks are on average making $450 a year more from each home mortgage today than before the global financial crisis.
The cash grab by big banks, revealed in analysis conducted for The Australian newspaper, threatens to further increase tensions between the banks and the Rudd government.
The banks have cried poor, declaring they cannot afford to pass on the full benefit of the Reserve Bank's latest 0.25 per cent interest-rate cut because they are suffering from increased costs.
However, an analysis of bank-funding costs by Fujitsu Consulting shows the major banks are making at least $450 a year more on the average mortgage now compared with two years ago, at the peak of the economic boom and when interest rates were higher.
The raised margin reflects reduced competition as the majors buy smaller competitors and non-bank lenders exit the market.
However, Fujitsu's findings were challenged by CBA and Westpac, the country's two biggest home lenders.
CBA spokesman Steve Batten said the $450 figure was "not consistent" with the bank's experience. "The margins on CBA's home loans... have contracted, as reported at our interim results in February," Mr Batten said.
Westpac spokesman David Lording said its margins had been "contracting for many years".
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