Rates round-up

SBS chief sees deposit war going for at least another year; Rabobank Capital Securities rate resets; BNZ five-month special ends, slashes 18-month terms and boosts 12-month

Monday, October 12th 2009, 10:38AM

SBS chief sees deposit war going for at least another year
Ross Smith, chief executive of the Southland-based bank SBS, expects the deposit rate war to continue for another year, as the major banks prepare for central bank-enforced liquidity requirements.

With the majority of their funds sourced from offshore wholesale customers, they have had to offer high yields to attract retail customers and prepare themselves for the pending regulation.

"Rates are about one-and-a-half to two percent above what you'd expect it to be, and that doesn't make for healthy business," Smith said. "Hopefully they'll move back towards where they are traditionally."

Rabobank Capital Securities rate resets
The interest rate on Rabobank Capital Securities for the next 12 months was reset at 4.123%. The interest rate reset annually until 2016 at the 0.76% margin over the one year swap rate, and after that, will be reset quarterly at the same margin over the 90-day bank bill rate.

BNZ five-month special ends, slashes 18-month terms and boosts 12-month
Bank of New Zealand's five-month special has ended with deposit rates coming down 120 basis points, 115 points and 110 points for deposits of $10,000, $50,000 and $100,000 respectively. The bank boosted its 12-month terms 60, 55 and 50 points, and lifted its $20,000 and $50,000 bonds by 50 basis points. BNZ slashed 18-month terms 60 points, 80 points and 75 points and cut its bonds by 75 and 40 points.

Fisher & Paykel Finance focused on six-month terms, boosting rates 25 points, while cutting three- and 12-month terms by 25 points and slashing 18-month, two-, three-, four- and five-year rates 50, 50, 100, 50 and 50 basis points respectively.

Rabobank cut its three month rate 10 basis points, the three-year 15 points and the five-year 40 points, while lifting six-month terms 20 points, 12-month and two-year terms 10 points each.

Credit Union Auckland boosted its nine-month rate 75 points and its 18-month and two-year terms 25 points, while SBS boosted rates on three-month deposits 75 basis points.

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