The banks are uniformly stating that the rate hike is necessary because 'lending will become less profitable' under the new regulations. It's a move to protect profit growth and keep the shareholders happy. Home owners will have their monthly mortgage payments increased so that the bank can keep their profits and share prices growing.

The APRA capital adequacy changes are only relevant to the banks which use the internal ratings-based (IRB) system of credit risk. There are only five lenders in Australia using this system, they are: ANZ, Commonwealth, NAB, Westpac, and Macquarie. As a further measure to protect their profits, these five banks have been cutting jobs. Between the five lenders there have been almost 1,500 jobs lost over the last 6 months.

As customers, with monthly mortgage payments, it is insulting that the bank would take extra money from us purely to keep the shareholders happy, but it could be worse! At least they didn't take away our income. That was saved for their own staff members. As with any company, banks are in business to make money. It just seems unfair when money and jobs are being taken from every day working people in order to maintain corporate growth figures.

The top decision makers within the banks (who earn the highest wages), will always focus on the shareholders. After all, it's the shareholders who have the power to vote them out of a job if they don't perform well. There is also the fact that their annual salaries usually include shares or options in the company. This means their personal wealth is directly linked to the share price. This is common with many large companies, and as someone who has invested in shares, I'm not entirely against it. Companies often act in ways which are detrimental to their staff and customers in order to protect profits. The difference with banks, is that their customers are the millions of Australians who are working hard to pay off their home loans.

The new capital adequacy ratios will make lending less profitable, and we understand there was a need to react. Were the banks correct to pass on this cost to their staff and customers? Could they have taken a more altruistic approach? Do you think share holders would be outraged if a bank announced 'profit growth will not meet expectations because we want to keep Australian mortgage payments low, and avoid cutting jobs'

What are your thoughts, we'd love to hear from you in the comments section below!