Bank competition for household deposits heats up

The global financial crisis has made household deposits more attractive for banks and consumers alike, according to a recent report conducted by independent market analyst Datamonitor.

Growth in outstanding household deposits has picked up over the last two years, growing from A$304billion in 2007 to A$429billion in 2009.

The Commonwealth Bank is currently the largest bank in terms of household deposits with A$125billion on its books, however the heightened competition over the last half year has seen its growth rates of deposits falter somewhat. ANZ and Westpac have increased their market share during this period; while the two largest bank groups, CBA/Bankwest and Westpac/St.George, currently hold more than half of outstanding bank household deposits.

Petter Ingemarsson, senior analyst and author of the study said the global financial crisis has benefited the major Australian banks.

“Smaller competitors have been choked and consumer sentiment has swung towards larger established financial institutions, which has left the major banks with a dominant grasp in several product categories.”

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