Bank margins under pressure: KPMG
Bank margins are under pressure amid record low interest rates and lenders may not be able to cut mortgage rates much further, according to a new report from KPMG.
KPMG's Financial Institutions Performance Survey (FIPS) suggests there is "increasing pressure" on margins as the official cash rate falls close to zero, at 0.25%.
The report says deposit funding "has limits which are required to keep the flow of funds, meaning that banks will only be able to reduce the deposit rates up to a certain point".
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