The Big Four ASX 200 bank shares closed in the red on Tuesday after all of them passed on the Reserve Bank's 0.25% interest rate cut in full to their home loan customers.
One bank also announced a 0.25% cut to various savings account products as well.
The Reserve Bank announced the first rate cut in more than four years this afternoon.
The market had already priced this likelihood in. Therefore, the benchmark S&P/ASX 200 Index (ASX: XJO) remained in the red after the announcement at 2.30pm.
The ASX 200 closed 0.66% lower at 8,481 points.
Let's check out what the Big Four banks had to say in response to the RBA's long-awaited cut.
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ASX 200 bank shares down as lenders announce home loan rate cuts
The Big Four ASX 200 banks appeared ready and waiting to share news of interest rate cuts on home loans immediately after the RBA announced its decision.
Two minutes after the RBA call was published on its website, Westpac Banking Corp (ASX: WBC) hit the send button on an emailed statement announcing rate cuts to its home loans and savings accounts.
Westpac will cut home loan variable interest rates by 0.25% per annum (pa) for new and existing customers, effective 4 March.
The bank will also cut rates on some savings account products.
The Westpac Life total variable rate with bonus interest and the Westpac eSaver total variable rate will both decrease by 0.25% to 4.75% pa, effective 28 February.
Despite these cuts to savings rates, Westpac Chief Executive, Consumer, Jason Yetton, said the bank's headline savings rates were still above the RBA's new cash rate of 4.1%.
National Australia Bank Ltd (ASX: NAB) emailed a statement three minutes after Westpac.
NAB will reduce its standard variable home loan interest rates by 0.25%, effective 28 February.
Group Executive, Personal Bank, Ana Marinkovic said:
The extended period of high interest rates has placed real strain on household budgets and this rate reduction will help to ease the financial burden.
We wanted to move quickly after the RBA's decision to provide customers with certainty.
NAB said it had changed its standard variable home loan rates in line with the RBA every time since 2017. The bank's statement did not address any changes to savings account rates.
Commonwealth Bank of Australia (ASX: CBA) sent out an email at 3pm.
CBA announced it will also decrease home loan variable interest rates by 0.25% pa, effective 28 February.
CBA's Group Executive, Retail Banking Services, Angus Sullivan, said:
We know that cash rate increases have been challenging for our home loan customers and they are looking forward to some relief.
As for savings rates, Sullivan said CBA would maintain its current 10-month term deposit special of 4.6% pa "for a limited time."
ANZ Group Holdings Ltd (ASX: ANZ) also announced it will cut variable home loan interest rates by 0.25%, effective 28 February.
As for savings accounts, the ASX 200 bank said it "continues to review other interest and deposit rates".
ANZ Group Executive Australia Retail, Maile Carnegie, said:
The Reserve Bank's decision to reduce the cash rate is an important step for our economy and will be welcome news for our borrower customers, providing some long-awaited relief from cost of living pressures.
We're conscious that interest rates for borrowers remain high. While our data indicates that our customers are generally faring well, some will still be facing challenges.
How did the ASX banks perform on Tuesday?
Westpac shares closed 2.97% lower at $32.31.
NAB shares sank 2.49% to $39.51.
The CBA share price fell 1.44% to $162.60.
ANZ shares dropped 1.77% to $30.61.
