Banks to pass on deposit guarantee
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ANZ and the Commonwealth Bank have announced they will pass on the costs related to the federal government deposit guarantee.
NAB & Westpac have yet to announce their plans which comes into effect from midnight 27 November 2008.
The Government has three scales for the deposit insurance, 70 basis points for AA-rated lenders, 100 basis points for those rated A and 150 basis points for BBB-rated and unrated organisations.
Institutions such as the Bank of Queensland will absorb as much of the cost as possible whereas other’s like the Macquarie Bank have advised they will absord the total cost of the guarantee.
Both the ANZ and Commonwealth Bank as AA rated lenders will pass on the full 70 basis point charge to customers, the ANZ will introduce this as an opi-in or opt-out for customers who have more than $1 million in a cash account.
For customers with less than $1 million the federal government will cover the cost of the guarantee.
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