Banks adopt retailing gimmicks
That means an $8 price becomes $7.99, or in these days when cent coins have been abolished, $7.95.
Bank of New Zealand is adopting the strategy with a vengeance, pricing its floating mortgage rate at 7.99% when most of the majors are charging 8% and also mostly pricing its fixed rates a basis point below the prevailing rates.
BNZ's head of customer services and sales support Ian Walsh readily admits his bank is using the same "retailing price philosophy" the shops use.
"Absolutely. Of course it's a competitive market and we're looking to acquire business in the home lending market. Price is one of the bases we compete on," Walsh says.
National Bank was the last of the big five banks to raise its floating rate after the July 3 increase in the Official Cash Rate and it followed a similar strategy by only raising from 7.75%, which was the same as the other majors, to 7.95%.
National Bank spokeswoman Cynthia Brophy says her bank is happy to talk generally about where interest rates are heading generally, but "we're not terribly keen to talk about our retail strategy."
