Which bank is quick to raise, but slow to pass when it comes to interest rates?

St.George Bank takes on average 15.5 days to pass on RBA cash rate cuts while taking just four days to raise rates, new research by Credit Suisse has found.

NAB and Westpac are the most prompt at passing on rate cuts – taking just eight days.

The figures are based on responsiveness of lenders to changes in the RBA cash rate for interest rate decisions dating from 2008 to 2013.

On average, Credit Suisse found that lenders are more than twice as quick to pass on a rate increase than a rate decrease.

They take three to five days on average to respond to a rate increase with the Commonwealth Bank being the fastest at 3.7 days and NAB’s Homeside being the slowest at 5.3 days.

In contrast, they take nine to 11 days to pass on a rate decrease.

ANZ takes the longest of the big four banks to pass on rate cuts – at just over 10 days, but also the longest on raising its mortgage rates following a cash rate rise. This result is skewed by the bank’s policy since January 2012 of making ‘independent ‘interest rate announcements on the second Friday of every month with a gap of 10 days or more between RBA announcements and ANZ decisions in some months.

Credit Suisse analysts Jarrod Martin and James Ellis say delaying a rate cut pass-through “incrementally increases net interest income in the relevant operating period”.

By delaying passing on rate cuts the big four banks, which have around 85% of the mortgage market, earn around $12 million a day from borrowers who have variable loans, Canberra-based think tank The Australian Institute calculated last year.

The latest data suggests big banks are taking less time to pass on cash rate increases while still taking as long to cut their mortgage rates when the cash rate falls.

In October last year the Economic Record, published by the Economic Society of Australia, reported that the major banks take 6.8 days to lift mortgage rates when the RBA lifts the cash rate and 10.6 days to pass on rate cuts.

This article first appeared on Property Observer.