Deposit inflows favour Investec, MEB and Macquarie

Whether it is the introduction of the government guarantee, canny pricing or the result of the success of longer term business plans it is hard to say, but there are some distinctive winners in the quest to attract deposits over the course of the December 2008 quarter.

Monthly banking statistics published by APRA on Friday show that Investec, Members Equity Bank and Macquarie harvested growth in household deposits over the quarter that were a major multiple of the overall growth rate of seven per cent.

Investec reported quarterly growth of 48 per cent; Members Equity Bank, 30 per cent and Macquarie, 26 per cent.

In business deposits Investec and MEB reported similar growth rates, though the latter's business deposits are very small.

The change over the latest quarter is of interest because the second phase of the credit crunch took hold with force during September 2008, beginning a process of bank failures and bank rescues that was extremely active in early October and still continues.

Over the second weekend of October the Australian government decided to guarantee bank deposits, a decision that may have helped stem increasing outflows at one or two banks.

Other business factors may be generating a loss of deposit balances at some banks in spite of continued strong growth as investors switch from other assets to cash.

ING Bank reported a decline in household deposits of four per cent over the quarter. HSBC Bank reported a decline of one per cent. Bank of Western Australia (now owned by Commonwealth Bank) reported growth of only one per cent over the quarter in household deposits and experienced an outflow of business deposits.

Among the major banks the pattern of inflows was mixed. Commonwealth Bank and National Australia Bank recorded growth in business deposits of in excess of 10 per cent for the quarter, compared with system growth of six per cent. Those two banks recorded below average growth in household deposits, however.