With the major banks scrapping hard for retail deposits to help bolster their balance sheets to meet new Reserve Bank funding rules, Westpac has lifted its total deposits by NZ$774 million in the March quarter.
Westpac New Zealand Ltd’s General Disclosure Statement for the six months to March shows total deposits at NZ$32.5 billion, up 2.4% from NZ$31.7 billion at December 31.
The Reserve Bank's new core funding ratio sets out that banks’ should source 65% of their funding from retail deposits and bonds of more than one year's duration. The central bank ultimately wants to lift this core funding ratio to 75% by mid-2012.
Westpac New Zealand chief financial officer Richard Jamieson told interest.co.nz the bank had met this requirement during the March quarter and was now well placed for the next couple of years having, on top of the deposits, raised NZ$2.9 billion worth of wholesale debt in the first six months of 2010. This included a NZ$1.5 billion seven-year euro denominated transaction it got away just before the Greek crisis flared up.
Jamieson attributed Westpac’s deposit growth partially to training staff up on the importance of deposits in the new regulatory environment. Westpac didn’t always aim to be the cheapest option for customers, he noted.
“What we’re really focusing on is driving a level of service to our clients which encompasses all the clients business,” Jamieson said.
“Not just say, picking up their homes loans which we might have done in the past. But making sure that we’ve got the end to end relationship with the clients and making sure we’re giving them service in every aspect. This includes pulling in their transaction accounts and any savings or term deposits they might have elsewhere.”
Westpac believed it was probably gaining deposits at the expense of ASB and/or ANZ, Jamieson added, given BNZ appeared to be “hoovering up deposits.”
Elsewhere Westpac’s total net loans rose NZ$574 million, or 1.2%, in the quarter to NZ$49.4 billion, from NZ$48.8 billion at December 31. In the six months to March lending rose NZ$1.7 billion which Jamieson said was to both retail and business customers. He noted, however, the figures excluded Westpac’s institutional bank where many sizable corporate customers were deleveraging.
Total assets rose NZ$897 million, or 1.6%, in the three months to March to NZ$56.3 billion.
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