ANZ Banking Group has raised its variable interest rates for retail mortgages and small business loans by 0.06 per cent.The move follows the Reserve Bank of Australia's decision on Tuesday decided to leave the cash rate on hold at 4.25 per cent.
ANZ today said it had lifted its standard variable interest rates on home loans to 7.36 per cent from 7.30 per cent.
However it cut its fixed lending rates.
The bank's three-year fixed rate home loan rate will fall by 0.15 per cent to 5.99 per cent.
ANZ Australia chief executive Philip Chronican said the decision to lift rates was made because of intense pressure on retail and business banking margins.
"In December and January we absorbed the additional funding costs in the hope that funding pressures would ease and that no change in lending rates would be necessary," he said in a statement.
"However, margins in retail and business banking have now been squeezed for a number of months and we've taken the difficult decision to pass on part of the higher costs to customers while we also get on with taking action to reshape the bank for tougher times."
ANZ no longer announces interest rate movements in lock-step with the RBA.
The move was designed to change the public's perception that ANZ's loan rates, and cost of funds, were tied to the RBA's cash rate.
National Australia Bank has the lowest standard variable rate (SVR) of the big four banks at 7.22 per cent.
Westpac offers 7.36 per cent, and Commonwealth's SVR is 7.31 per cent.