JP Morgan and The Financial Review Got It Wrong

I still can’t believe that Fin Rev’s editors let it go to press yesterday.  How can they possibly think that the headline “Home loan discounts close to damaging banks” makes any sense?  The banks simply don’t lend unless they know they’re going to make a profit.  The author of the article attributed the comment to a bank analyst with JP Morgan, who actually sent it in a note to his clients, saying that discounts to standard variable rates “had quickly climbed in the last 12 months from 0.7 of a percentage point to 0.9”.

There’s also a graph showing the average weighted discount ranging as low as 0.1% in September 09 to over 1.0% now.  I wonder where they were when banks were openly advertising discounts of 0.7%?  In monitoring the banks closely for the last few years, I’ve noticed that they have and will give discounts of 0.7% to just about anyone with a full-time job and a good credit history.  All you have to do is ask or get a good broker.