LendMark, the lender’s main competitor in the Australian real estate market, has been hit by a sell-off in the US, as the US Federal Reserve raised its benchmark interest rate.
Lendmark’s shares have plunged almost 5 per cent since the Fed announced its decision on Monday.
Shares in the lender have also dropped nearly 10 per cent.
The move came after the lender raised its rate from 1.25 per cent to 1.5 per cent and announced it would be laying off about 100 staff and laying off 10,000 employees over the next six months.
In a statement, Lendman said the company’s current focus was on supporting its customers and shareholders.
“Our strategic focus remains to grow and expand, while also continuing to improve our operational and financial performance,” the statement said.
Key points: The US Federal Government raised the US benchmark rate to 1 per cent in June, which has been in place since June 2009.
On Monday, the US central bank also raised the benchmark interest rates for two more years to 3.25 and 3.75 per cent, bringing the total to 5.75 and 6.25, respectively.
It was the first time in five years that the US has raised the central bank’s benchmark interest on an annual basis, which means banks can borrow and lend to each other more cheaply.
But the Fed is expected to reduce its key rate by more than half next year, and in a further move to help the US economy, it raised the minimum rate by $1.50 per $100 of gross domestic product for the first three months of 2017.
For the next three months, the Fed will be able to set a minimum rate that is equal to or less than 2.5 percent for the rest of 2017, according to the US Bankers Association.
Investors were expecting a hike in the benchmark rate of about 0.5 percentage points, or 0.15 percentage points per annum.
According to a Reuters poll of financial markets conducted on Monday, about three-quarters of US investors expect the Fed to hike its benchmark rate next year.
US Federal Reserve chairman Jerome Powell said last week the Fed would likely raise its benchmark borrowing rate for the next two years to 2.75% from the current 2.25% and to keep interest rates low for longer.
While the US stock market has been up this year, the market has lost a significant amount of its value since the Federal Reserve’s rate increase announcement.
Many analysts have downgraded the value of the US’s economy and stocks as a result of the Fed’s announcement.
Inflation was at its lowest level since the late 1990s last month, but some economists warn that the Federal Government may have to take more drastic measures to reduce unemployment, which was previously estimated to be well below 5 per-cent.
There have been concerns that the Fed may increase interest rates sooner rather than later to counter the inflation threat, which would further drag the US economic growth into a negative territory.