Westpac slips on PR banana appeal

10-Dec-2009 A FIERCE community backlash has forced Westpac to remove an online video which likened rises in mortgage repayments to the cost of banana smoothies.

The video was included in an email to customers justifying the bank's recent interest rate hike by comparing the bank to a business selling banana smoothies.

The segment had also been posted on Westpac's internet site on a page that explained the bank's monster 45 basis point interest rate rise last week - an increase almost double that of the Reserve Bank's 25 basis point rate rise.

Called "childish" and "condescending", the video sparked outrage among news.com.au readers, receiving more than 350 comments and hundreds more not suitable for publication.

Even Prime Minister Kevin Rudd weighed in with criticism.

A Westpac spokeswoman said the video would now be removed.

"The video was developed a few months ago to help our staff understand what had happened in the context of the Global Financial Crisis," the spokeswoman said.

"They found it very helpful.

"Some of the staff had asked to share the video with customers who had asked them questions about the GFC.

"Following feedback today we will remove the video.

"We understand that people have different levels of understanding about the way banks get their funding.

"We also know that people don't like our explanation for our rate rise."

PM not impressed

This morning Mr Rudd chastised the bank for the email, saying the company was dealing in matters which affected peoples' lives.

"I think Westpac should have a long hard look at itself," Mr Rudd told ABC Radio.

"(They are) talking about peoples' most basic things in life - a mortgage, an affordable mortgage, to underpin things as basic as a home."

He said the bank had done "the wrong thing" through its rate hike and urged customers to take their business elsewhere if they were concerned.

"Customers out there should be looking at where else they can do their banking," Mr Rudd said.

Bananas and interest rate hikes

The bank's bid to explain its decision to lift its standard variable mortgage rate by 45 basis points last week, nearly double the Reserve Bank's 25-basis-point rise earlier the same day, was attacked by marketing experts and consumer advocates.

The Sydney Morning Herald reported an email, sent by the bank's retail chief, Peter Hanlon, included an animated video entitled Cool Bananas, which began with the words "once upon a time" and told how damage to banana plantations pushed up the price of bananas.

"That's why the price of smoothies increased by 50c," the voiceover says.

"In some ways a bank is really just like a company that sells banana smoothies. A bank is a business that buys and sells something . . . only in this case that something is money."

The bank justifies its supersized rates increase by saying that if it did not do so, then it would not be in business "tomorrow" and would not "be there" for its customers.

Stephen Pearson, head of ad agency Lowe Worldwide, told the Herald the bank was only making the situation worse.

"The long-winded parable of Westpac being like a banana seller in a storm on a tropical island somewhat beggars belief," he said.

"The style and tone is quite childlike and, for any educated person, likely to be seen as condescending."

After Westpac lifted its rates by 45 basis points the Commonwealth Bank raised its variable rate by 37 basis points, and the ANZ jumped by 35 basis points. Of the big four banks, only the National Australia Bank stuck to the Reserve's 25-basis-point rise.

Source: http://www.news.com.au/money/banking/westpac-goes-bananas-over-rate-hike/story-e6frfmcr-1225808477891

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