Small business borrowers could face further interest rate rises as banks grapple with an increase in the cost of funding, Commonwealth Bank’s CEO has warned.
Ian Narev rejected criticism from Treasurer Wayne Swan that banks’ margins have returned to pre-GFC levels, saying that borrowers shouldn’t expect their mortgage rates to go up and down in line with the official Reserve Bank rate.
CBA, along with the other “big four” banks have come under fire this week for lifting their rates despite the RBA’s decision to freeze the official cash rate.
US firm makes Billabong bid
Troubled surfwear company Billabong has reportedly received a $766 million takeover bid from US firm TPG.
According to the Australian Financial Review, the offer, which equates to at least $3 a share, follows a structural review by Billabong, which has amassed a $600 million debt.
Italy and Netherlands in recession
Two of Europe’s leading economies have officially dipped into recession, according to new figures.
Italy and the Netherlands both suffered economic contraction of 0.7% in the fourth quarter, the second successive quarter of shrinkage.
Germany also had a bad quarter, with its economy dipping by 0.2%, although France recorded a surprise 0.2% growth.
Overnight
The Dow Jones Industrial Average fell 89.46 points, or 0.7%, to 12,788.82. The Australian dollar dropped to 107.04 US cents.
