“As the Reserve Bank cash rate has reached record lows, we face a difficult balancing act between the multiple, valid interests of our stakeholders," he said.

"Particularly given it is currently not feasible to pass on the full rate reduction to more than $160 billion of our deposits which are at, or near, zero rates."

CBA will reduce the base rate available for customers of its NetBank Saver product by 0.05 basis points. A spokesperson for the bank said the move was an effort to "limit" the adverse impact on savers, who are being disadvantaged in the low rate environment.

NAB chief customer officer, consumer banking, Mike Baird acknowledged the impact of low interest rates on savers and investors.“With the RBA cash rate at historic lows, the cost of deposits comes under pressure,” Mr Baird said. “This dynamic is unlikely to change for the foreseeable future.”

The bank claimed that the 15 basis point cut makes its standard variable rate the lowest of the major banks.

ANZ and Westpac are yet to respond to the RBA announcement.

The RBA's board decided at its October meeting today to reduce the official cash rate by 25 basis points to a record low of 0.75 per cent. The decision was in line with market expectations and is the third rate cut by the central bank this calendar year.

Analysts and economists were widely predicting the big banks would pass on reductions lower than the RBA’s 25 basis point cut to official rates, due to increasing pressure on profit margins.


The announcement comes as the big four lenders are ceding market share to foreign-domiciled competitors, non-bank and regional banks and fintech challengers.

According to UBS data, CBA was the only major to grow its mortgage book in August, while NAB’s growth remained flat.

Both Westpac and ANZ saw monthly declines in the size of their home loan portfolios, experiencing 0.1 per cent and 0.2 per cent drops respectively. ANZ’s August results continue the bank's “unprecedented” loss of market share in the mortgage market.

Over the same period, ING recorded 1.1 per cent growth in its mortgage book, HSBC saw 1.5 per cent growth and Macquarie saw 3.5 per cent growth month on month, according to UBS.

Fintech lender Athena Home Loans, which is backed by industry super fund Hostplus and was founded by former NAB bankers Nathan Walsh and Michael Starkey, announced it was passing on the cut in full to customers.

The start-up unveiled a 2.84 per cent per annum variable rate for principal and interest owner-occupiers and a 3.24 per cent per annum offer for investors.