Ten million dollar bank wins June quarter term deposit war

Ten million dollar bank wins June quarter term deposit war

ASB came out on top in a key area of bank funding in the June quarter, growing its term deposits by more than any of its rivals.

ASB grew term deposits by about NZ$400 million in the three months to June 30. Westpac came in second, securing NZ$329 million with BNZ third at NZ$277 million. ANZ’s term deposits fell by NZ$345 million. The figures come from the banks June quarter general disclosure statements.

The major banks are aggressively chasing retail term deposit money given the Reserve Bank’s introduction of the core funding ratio (CFR) on April 1. The CFR sets out that banks must source at least 65% of their funding from retail deposits and bonds with durations of at least one year. The central bank wants to increase the CFR to 75% by mid-2012 to offset New Zealand banks previous reliance on international wholesale, or 'hot' money, markets.

In a sign of its strong desire to attract term deposit cash, ASB introduced a new policy on July 1 whereby it will now accept term deposits from a single customer worth up to NZ$10 million. Previously the maximum was NZ$250,000 per individual deposit. None of the other major banks are openly courting individual term deposits of as much as NZ$10 million.

As of June 30 ANZ’s term deposits stood at NZ$33 billion, ASB’s at NZ$18.1 billion, Westpac NZ$17.46 billion, and BNZ at NZ$17 billion.

Among the smaller banks, Kiwibank grew retail deposits by about NZ$78 million over the June quarter to NZ$6.911 billion. TSB’s retail term deposits at June 30 stood at NZ$1.948 billion, up NZ$70.25 million from March 31. And SBS Bank’s term deposit base shrank by about NZ$152 million to NZ$2.18 billion. SBS, which is also a mutually owned building society, includes redeemable shares in its figure.

Rabobank, whose advertised term deposit rates have been among the best on offer in recent months, is yet to release its June quarter general disclosure statement. However, a Rabobank spokeswoman told interest.co.nz in early July the bank’s total deposits had risen by about NZ$300 million since March to NZ$2.3 billion.

The big banks are all currently offering three to nine month term deposit rates in excess of the Official Cash Rate, which currently stands at 3%.

See all bank one to nine month term deposit rates here and see all bank one to five year term deposit rates here.

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