Westpac and ASB made big strides during the March quarter in the term deposit market, a key area of focus for banks under new Reserve Bank funding rules.
Westpac grew term deposits by NZ$866 million and ASB by about NZ$800 million in the three months from December 31 to March 31. Heading in the opposite direction was ANZ New Zealand, which shed NZ$838 million worth, and BNZ whose term deposits dropped by NZ$287 million.
The Reserve Bank’s core funding ratio (CFR), introduced in April, means the banks need to source 65% of their funding from either retail deposits or from wholesale borrowings that have maturities of more than one year. The central bank aims to lift the CFR to 75% by mid-2012.
Westpac’s total term deposits rose 5% during the quarter to NZ$17.13 billion from NZ$16.26 billion.
The changes in market share came despite all the major banks offering depositors' similar rates. See all bank term deposit rates here.
Westpac chief financial officer Richard Jamieson recently told interest.co.nz Westpac’s moves to train staff up on the importance of deposits under the new regulatory environment was a factor behind the bank’s success in attracting new deposits.
“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.”
Meanwhile ANZ New Zealand’s total term deposits, including ANZ and the National Bank, fell 2.4% to NZ$33.39 billion from NZ$34.2 billion. BNZ’s total term deposits dropped NZ$287 million, or 1.6%, to NZ$16.7 billion in the three months to March from NZ$17 billion at December 31. All figures except ASB's are based on the banks' latest general disclosure statements. ASB's March General Disclosure Statement doesn't break out a figure for term deposits, but a spokeswoman for the bank said they stood at NZ$17.7 billion at March 31. That's up about 4.7% from NZ$16.9 billion at December 31.
State owned Kiwibank saw its retail deposits fall slightly, by NZ$7.69 million to NZ$6.883 billion in the quarter.
* This article was first published in our email for paid subscribers earlier today.See here for more details and to subscribe.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.