PSIS says margin on deposits more than halved
PSIS says it has had to cut the margin between its floating lending rates and term deposit specials as the credit crisis took hold.
Wednesday, 17 June 2009
by Paul McBeth
The difference between its floating rate and six month term deposit narrowed to 70 basis points from 180 points in June last year as the central bank slashed the official cash rate 5.25 percentage points to deal with the global economic downturn. Deposits rose 8% to $1.1 billion and helped underpinned the cooperative's liquidity in a year where it made an underlying profit of $3.9 million.
The cooperative's special deposit rates "are 10 to 15 basis points above the competition" said chief executive Girol Karacaoglu. "Our position in general is that we try to keep deposit rates a little bit above or equal to the main banks and competitors."
Banks and non-bank deposit takers have been forced to compete for a dwindling pool of assets domestically as credit lines dry up, and term deposit rates have remained resilient despite the central bank slashing the official cash rate to a record-low 2.5%.
Although the PSIS doesn't have to contend with the major banks' bidding for wholesale depositors, the retail market is tight, and chief financial officer Mark Wilcox said investors aren't unwilling to accept returns much lower than 4%.
Karacaoglu was pleased with the prospect of increased saving from higher deposit rates, and dismissed the notion that the economy would be lifted out of recession by stoking consumer spending.
He said the co-operativewas focussed on retaining customers in the current market.
Commenting is closed
Find a Rate
27 January 2015
11 July 2014
10 July 2014
2 July 2014
25 June 2014
Cash PIE Rates
Weekly Updates including news and commentary
Disclaimer - Every possible effort has been made to keep the information in the tables and on this site as accurate as possible, however, neither the publisher, Tarawera Publishing, nor anyone engaged to compile the rates and this site accept any liability for inaccuracies or any loss suffered as a result. It is strongly advised that readers check loan details with providers. The full terms and conditions of this site can be found here.
© Copyright 1997-2015. Tarawera Publishing Ltd. All Rights Reserved.