(7 September 2012 – Australia) The bulk of deposit growth in the business market is still largely the domain of the Big four domestic banks research from industry consultants East & Partners’ latest Deposit Funding & Debt Index has shown.With a collective deposit to lending ratio of 1.07 as at the second half of
2012, the big four banks are receiving A$1.07 for every A$1 they are lending out
to businesses. The regional banks meanwhile are lending out A$1 for every A$1
they gain in deposits with a ratio of 1. Funding for the regionals by
implication remains very tight although has shown clear improvement based on
their domestic deposit taking from business markets over the past two years and
flat lending volumes.
The DFDI ratios between the Big 4 and the regionals are becoming more evenly
balanced, with the regionals gaining parity and the Big fours’ lending beginning
to balance out their deposit takings. By comparison, in the second half of 2010
the deposit to lending ratio for the big four was 1.12 while for the regional
banks it was 0.84.
Deposit to Lending Ratios – The DFDI
| Big 4 | Regionals | |
| H2 2012 | 1.07 | 1.00 |
| H2 2011 | 1.09 | 1.00 |
| H2 2010 | 1.12 | 0.84 |
Source: East & Partners’ Deposit Funding & Debt Index
Further highlights of this monthly bank funding report include:
-
Business Deposit/Lending Volumes by Segment
-
Term versus On Call Deposits Volumes by Segment
-
Term Deposit Tenures
-
Business Churn Levels in On Call Deposits by
Segment -
Business Deposit Balances/Business Lending
Balances -
Total Deposit/Total Lending Market Share
-
Lending and Deposit Ratios
- Fully 30 individual banks covered each month
East & Partners’ Head of Client Development David Brown commented, “The
availability and cost of offshore funding over the past four years has been
severely stressed, forcing all banks to have a greater focus on domestic
funding. As competition between the banks reaches record highs, we have noted a
large jump in business utilising HYOD accounts. As businesses are now able to
shop daily for the best deals, interest rates are becoming a far greater factor
in the decision making process than the brand of bank”.
About East & Partners’ Deposit Funding & Debt Index
A monthly analysis across Australia’s total business and consumer deposit and
lending markets, enhancing data sourced from APRA. The ADI data is overlayed
with a set of demand-side analyses based on East & Partners’ continuous
whole-of-market customer research programs to produce the Index’s set of ratio
indicators. The Index focuses on critical market measures including business
versus retail deposit volume ratios, the ratio of deposit versus lending by bank
by market segment, deposit market share and the total market deposit funding
index.
Also reported each month are unique segmentations based on depositor size and,
importantly given BASEL III’s impact, the Index also splits On Call and HYOD
deposit volumes by segment from Term Deposits across 3, 6 and 12 month tenures –
hot and sticky deposit business flows, tied versus free deposit balances,
deposit churn forecasts and rate triggers for depositor switching.
Note: Business Depositor Segments:
› Institutional – A$530 million plus
› Corporate – A$20-530 million
› SME – A$5-20 million
› Micro – A$1-5 million
For more information or for further interview based insights from East &
Partners on this DFDI Index, please contact:
Sian Dowling
Marcomms & Client Services
East & Partners
t: 02 9004 7848
m: 0420 583 553
e: sian.d@eastandpartners.com