Commonwealth selectively lifts deposit rates
Commonwealth Bank said it would target select segments of the market for higher deposit interest rates in order to compete with the appeal of high yield deposit accounts from foreign banks, but also said the bank would be selective. CBA said its share of the market for retail deposits fell by about 0.5 percentage points over the last year, and may decline further, due to more aggressive competition on savings account interest rates and signs of predatory pricing from foreign banks. CBA chief executive David Murray said “there was no point coming out in a market like this with a white flag. We will be competitive, but that does not mean re-pricing the whole book.” Murray said that, “it is the ability to provide transactional service in the long term that will prevail.” Murray means that CBA won’t offer higher rates to many depositors, but will rely on on the convenience of the bank’s branch and ATM network to retain depositors.