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Category: Money and Monetary Policy / Banking / Consumer Finance

ANZ boss concedes most savers will not see deposit rate rise

Friday, 5 Aug 2016 07:48:49 | Peter Ryan

ANZ's boss Shayne Elliott said "I'm not sure I'm happy to attend" Parliament. (AAP: Mal Fairclough)

ANZ Bank chief executive Shayne Elliott has confirmed the vast majority of savers will not benefit directly from higher rates on term deposits as part of the carve-up from Tuesday's Reserve Bank rate cut.

"I think that the vast majority of account balances will miss out, that's true," Mr Elliott told the ABC's AM program.

However, Mr Elliott denied the rate rise on selected term deposits was just an attempt at positive spin on the failure to pass on all the RBA's Tuesday rate cut to home loan customers.

Mr Elliott said term deposits are the best form of liquidity for banks at a time of tighter margins and regulatory requirements.

"They're (term deposits) in a sense more valuable to us as a bank than just regular accounts and we're willing to pay up for those," he explained.

Mr Elliott was responding to criticism that 60 per cent of savings accounts will miss out on any benefit after ANZ raised two-year term deposits by 0.75 per cent while not passing on the Reserve Bank's 25-basis-point rate cut in full to borrowers.

ANZ boss will reluctantly front Parliament

Mr Elliott said customers could make a choice, and the bank was simply encouraging them to do something that better suited its funding needs.

"Certainly people do have the option to be able to move more of their savings into savings accounts, whether it's mortgage offset accounts or term deposits," Mr Elliott said.

These price signals will help people make that decision if that's the right thing for them.

External Link: Peter Ryan speaks with ANZ CEO Shayne Elliott

Mr Elliott has joined the rest of the big four bank bosses in agreeing to face the House of Representatives Economics Committee in Canberra at least once a year to explain rate setting decisions.

But Mr Elliott says he will go to Canberra reluctantly.

"I'm not sure I'm happy to attend. It's obviously going to be a pretty intense experience, but I understand the need for it," Mr Elliott said.

"I think that more transparency is always a good thing so I think I can only help"

Mr Elliott rejected calls for a royal commission into banks, saying the parliamentary hearing would provide better structure, boundaries and discipline.

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