Deposit competition to continue as Basel III approaches
Competition between banks for deposits hasn’t stopped ME Bank tripling its customer deposit book to about $7 billion in the three years to April 2013, the bank revealed today.
Jamie McPhee, ME Bank CEO, said “ME Bank now has one of the fastest growing deposit books of any bank.”
“Several channels have contributed to the growth of our deposit book, resulting in a highly diversified deposit balance sheet.”
In explaining the success of its deposit strategy, McPhee said ME Bank has worked hard to build a reputation for consistent and competitive deposit rates.
“One area where we’ve really appealed is the way we manage our maturing term deposit profile, taking a much fairer approach to the other banks.
“Sudden rate cuts of more than 2 per cent on term deposits is an unfair practice that many banks use to their own ends, giving them access to cheaper money at the expense of depositors who forget to check their rates at rollover.
“Being owned by some of Australia’s largest industry super funds, regulated by APRA, and having a government guarantee on deposits up to $250,000 has also underpinned our appeal.”
McPhee said that “despite the recent performance of the share market, cash deposits will always remain an important part of an investor’s portfolio.
“Providing relevant deposit products will help ME Bank sustain growth in its mortgage book and better positions us for the changing regulatory environment.”