The business media has allowed the Commonwealth Bank to get off lightly with its latest rate rise.

Yesterday, the CBA announced it would raise its standard variable home loan rate by 0.35% — 0.10% more than last week’s official cash rate rise — which takes its total rate increases for the year to 0.75% — 0.25% more than the offical RBA hikes.

So far we have had no explanation from the CBA why its funding costs have been so high to demand such a large increase.

In contrast, the National Australia Bank has only increased its rates by 0.66% over the same period and from this week Westpac customers will be hit with a 0.30% increase, meaning Westpac has snuck through an extra 0.20% in its rate rises so far this year. St George has signalled it is considering a 0.40% increase, which would take its additional rise to 0.35%.

The ANZ will reveal its rate increase today. Don’t be surprised if it goes big as it has had more than its share of dodgy loans (Tricom).

The CBA is also being skimpy on its deposit rates. It said yesterday that: “The deposit interest rate on the NetBank Saver and Business Online Saver accounts will increase by 0.25% pa, effective 12th March. The applicable interest rate for the NetBank Saver account is now 7.00% pa and Business Online Saver moves to 7.15% pa.”

You can get 8% for online accounts from Citibank and 8.05% from Rabobank. ING Direct pays between 8% and 8.10% for online deposits of 180 days plus.

CBA also announced it had discontinued the share purchase to neutralise its dividend reinvestment plan. The banks claims this will have the effect of increasing capital by about $400 million, enabling the bank to continue to support its customers and consider opportunities that may arise.

That’s disingenuous as the on market share buybacks for the DRP were done to limit the dilutionary effect of the DRP on the number of shares on issue and to keep its capital base steady, which annoyed big investors and their broking analyst mates. If it had been worried about the DRP, CBA should have dropped it all together, but had to offer it because small shareholders wanted it.

Some commentators had the hide today to describe capital in the form of DRP as expensive: haven’t they looked at interest rates lately? Capital is a rare commodity, it’s in short supply and one of the reasons why the banks and other financial groups are being battered. When a bank like the CBA has the chance to raise it, effortlessly from loyal shareholders, it’s cheap.