BankWest customers may not stick with CBA

The takeover of BankWest by Commonwealth may not result in striking gains in customer numbers for CBA, given the high level of overlap between the customer base of the two banks.

Moreover, the unusually high level of average deposit balances of BankWest customers suggests that the funds may not be very sticky and the customers not all that loyal.

Data supplied by Roy Morgan Research shows just over one quarter, or 25.5 per cent, of the BankWest retail customers are already customers of CBA.

Nearly a quarter, 24.4 per cent, deal with Westpac/St George; 20.5 per cent are customers of ANZ; and 14.1 per cent are customers of NAB.

Roy Morgan, based on survey data, estimates there are 606,000 retail customers of BankWest of which 155,000 already deal with CBA, resulting in a gain of approximately 451,000 customers.

The average deposit balance of a BankWest customer is about $31,000 according to Roy Morgan research, which is the highest average deposit of any bank in its survey. This is turn reflects the market positioning and deposit pricing of BankWest as it pursues the east coast expansion strategy (and which CBA seems likely to halt).

The average balance for customers of ING Direct, which used to be the price leader in deposits, is around $29,000 according to Roy Morgan Research.