BankWest lacks traction in deposit market

BankWest may be developing brand recognition in the eastern states but it is losing  traction in the deposit market of late, as savings pushed out of the stock market flow into the big banks rather than to challengers.

So the bank has refreshed pricing on its deposit products in the latest initiative under the banner of the bank's "Happy Banking" marketing campaign.

The bank revamped interest rates on the TeleNet at-call savings account, with new deposits from this week accruing interest at 8.25 per cent - though only until the end of 2008.

BankWest also increased the maximum balance from $1 million to $5 million, to attract a different depositor demographic.

Financial and investments infomediary InfoChoice confirmed the bank's claim of offering Australia's highest variable at-call online rate, with RaboPlus next placed at 7.8 per cent and Members Equity at 7.5 per cent. ING Direct also has a promotional rate offer of 7.9 per cent, though the standard at-call rate for the one-time market leader is only 6.9 per cent.

Ian Corfield, chief executive of the retail division of BankWest, highlights strong competition for disappointing deposit growth for the bank.

APRA household deposit data, a rough indicator of retail deposits, shows BankWest deposits increased six per cent to $13 billion for the year to March 2008. The major five banks all increased above ten per cent, from much higher bases.

"The reality is we have seen intense competition in the deposit market in the first three months of this year, and that has meant that our balances haven't grown as strongly as we would like them to.

"This is one part of our response to that".

The heavily television advertised Rate Tracker home loan was the first step in the Happy Banking initiative, offering a home loan one per cent lower than the major four bank standard variable loan average, with the second the Zero Transaction account.

"We are aware we need to grow our brand. We are a very well known brand on the West Coast of Australia, with 99 per cent product awareness.

"But we need to grow brand awareness on the East Coast".

Corfield said BankWest brand recognition has increased twenty points in the last six months in the Eastern states, to around 70 per cent.