Brutally competitive deposit rates as banks woo savers
Unprecedentedly high deposit rates show New Zealand banks are seeking out savers "in a brutally competitive manner", says the first in a new PriceWaterhouseCoopers report on the country's Australian-dominated banking sector.
Thursday, August 13th 2009, 1:00PM
"The fact that borrowers are paying higher margins has received much attention," the report says. "But how often have we read that many retail deposit rates are presently above the Official Cash Rate - a phenomenon which is almost unprecedented and reflects the vlaue the banks are lacing on customer deposits as a source of funding.
"In our opening, banks are paying for customers for the value implicit in deposits in a brutally competitive manner."
This will add to other pressures on banks' margins until the dust settles on the current period of "rapid changes in monetary policy", says the PWC report, which analyses the half-year profit announcements of the Australian-owned Bank of New Zealand, ANZ National Bank, ASB and Westpac banks, and the New Zealand government-owned Kiwibank
Attractive corporate bond offers and capital-raising had also siphoned much of the potential growth in bank deposits created by the "flight to quality" after finance company collapses last year.
| « Two top finance companies junked | Rates Round Up » |
Special Offers
Commenting is closed
|
|
Printable version |
|
Email to a friend |
