[R]3:00AM New York, 7:00PM Sydney – Westpac, the third largest bank to raise its mortgage rate and blamed it on the rising cost of wholesale banking.[/R]

Market Sentiments

ASX 200 index gained 0.3% or 15.4 to close at 5,602.70.

The preliminary market turnover was 1.34 billion shares worth $5.52 billion, with 632 up, 571 down and 336 unchanged. The most traded stock was Empire Oil and Gas with trading volume of 84.31 million shares worth $1.47 million.

Market Driver

The Commonwealth Bank Group today announced that it spend $580 million on a comprehensive program to modernize its existing banking legacy systems with a customer centric platform developed with the help of Accenture.

Ralph Norris, CEO of the Commonwealth Bank said, ""The modernisation of our core systems is a fundamental strategic plank to the successful future of the Group.”

The Group has selected SAP for Banking Solutions based on SAP''s leading technology platform, NetWeaver. It has also appointed Accenture to support the implementation of the programme.

The company through the implementation of new information system and reorganization expects to achieve $200 million in savings.

Michael Harte, the Group''s Chief Information Officer said, ""The transformation programme will see the removal of the current legacy systems that have supported the Group for over 45 years. While legacy systems are inherent in all large financial institutions, few have had the courage to challenge and execute the necessary changes.

CBA share traded 2.8% higher.

Gainers and losers

Of the ASX 200 index stocks, Western Areas led the gainers with a rise of 11.7% followed by increases in AED Oil Ltd of 7.8%, in Mount Gibson Iron of 6.1%, in Macquarie Trust of 6% and in Centro Retail of 5.8%.

Of the ASX 200 index stocks, Coeur D''Alen-CDI led the decliners with a fall of 6.5% followed by losses in JB Hi-fi Ltd of 6.5%, in Acquarius Platinum of 6.1%, in Australia Worldwide of 5.6% and in ABC Learning of 4.9%.

Westpac raises rates

Westpac Banking Corp today announced that its standard variable home loan rates would rise by 10 basis points to 9.47% from Friday.

Westpac''s became the third bank after ANZ Banking Group Ltd and National Australia Bank Ltd to raise its variable mortgage rates in less than a week, independent of the central bank.

The latest round of interest rate hikes are on the back of rise in wholesale borrowing costs.

""We are mindful that this additional rise will have an impact on some family budgets,"" Westpac group executive of consumer financial services Peter Clare said and further added that bank''s funding costs remain at record levels.

The Reserve Bank of Australia last increased its official rates in February, when its cash rate went up to 7.25%. Westpac''s share was up 1.2%, ANZ Banking Group Ltd rose 3.2% and National Australia Bank Ltd added 3.2%.