Commonwealth Bank is earning an additional $1.7 billion in annual profit as more depositors opt for 'online' savings accounts. Macquarie's analysis reveals that higher-interest 'bonus saver' products are also popular among customers at rival banks. This advantage in deposit pricing has contributed to Commonwealth Bank's outperformance in the stock market. However, the bank, along with its competitors, does not disclose the breakdown of funds between 'online' savings accounts and 'bonus savers'.
Commonwealth Bank is raking in an extra $1.7 billion of annual profit because more of its depositors hold funds in “online” savings accounts, while higher-interest “ bonus saver ” products are more popular with customers at rival banks, according to Macquarie.
This beneficial mix allowed CBA to pay out relatively less interest to customers, supporting its “net interest margin”. “Deposits remain the key differentiators for banks, which is even more evident in the environment of higher rates,” Mr German said in the report.ACCC deposit inquiry in December identified problems with the market’s transparencyGiven inevitable political scrutiny on the banks leading into the next federal election, to ensure official rate cuts are passed through in full to home loan borrowers, analysts said deposits would be the way banks manage margins during the looming loosening cycle.
In 2019, the average “base” rate was 0.65 per cent below the cash rate; today, it is 2.30 per cent below, according to Morgan Stanley’s numbers., Australian Competition and Consumer Commission chairwoman Gina Cass-Gottlieb said its retail deposits inquiry last year found customers reporting difficulties searching for, comparing, and switching between savings products.
Commonwealth Bank Profit Online Savings Accounts Bonus Saver Deposit Pricing Stock Market Finance
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
ASX CBA: Macquarie says time to sell Commonwealth Bank, National Australia Bank, Westpac and ANZThe broker has taken a “more aggressive stance” on Australia’s banking sector, saying that share prices don’t match the outlook for earnings.
Read more »
Supermarkets-Those ‘obscene’ big business profits are actually our profitsThe politicians and media who scapegoat big business ignore how the great bulk of their profits flow right across the Australian community.
Read more »
Commonwealth Bank cuts the number of interest-free days on its rewards credit cardsThe big banks have all been slowly lifting their rates, while Commonwealth and Westpac have also increased annual fees.
Read more »
Commonwealth Bank customer’s scary online banking experience7NEWS brings you the latest local news from Australia and around the world. Stay up to date with all of the breaking sport, politics, entertainment, finance, weather and business headlines. Today's news, live updates & all the latest breaking stories from 7NEWS.
Read more »
ASX 200 LIVE: Reserve Bank leaves interest rate at 4.35pc; Bank of Japan liftsShares rise after Reserve Bank kept interest rates on hold; Bank of Japan ends negative rate policy; Michele Bullock press conference coming up at 3.30pm AEDT; Boral board rejects Seven takeover bid. Follow here for more.
Read more »
ASX 200 LIVE: Reserve Bank leaves interest rate at 4.35pc; Bank of Japan liftsShares rise after Reserve Bank kept interest rates on hold; Bank of Japan ends negative rate policy; Michele Bullock press conference coming up at 3.30pm AEDT; Boral board rejects Seven takeover bid. Follow here for more.
Read more »