ASB first big bank to get guarantee

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ASB Bank has become the first of the big retail banks to be approved under the government’s retail deposit guarantee firm.

Wednesday, November 5th 2008, 5:44AM

ASB’s approval comes against a backdrop of rumours that the big banks opposed joining the retail scheme as their fees are essentially being used to allow finance companies to be covered by the scheme.

Under the scheme institutions with more than $5 billion in assets are being charged at 10 basis points which equates to many millions of dollars for banks while smaller institutions don’t have to pay a fee.

However, it now looks like the big banks are starting to apply to join.

Depositrates.co.nz understands that both Westpac and Bank of New Zealand have made formal applications, after indicating earlier that they intended to apply to join.

Westpac and ANZ National have yet to lodge applications.

The government announced on the weekend that it will offer wholesale funding guarantee to New Zealand banks.

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