Rabobank's strength an attractive alternative to cost of government guarantee for deposits over $1 million
Rabobank Australia Limited's strength offered Australian depositors an attractive alternative to potentially costly government-guaranteed retail products for deposits over $1 million
Sydney, NSW (PRWEB) November 29, 2008 -- RaboPlus - a division of Rabobank Australia Limited - today said Rabobank Australia Limited's strength offered Australian depositors an attractive alternative to potentially costly government-guaranteed retail products for deposits over $1 million.
RaboPlus general manager Mr Greg McAweeney said "RaboPlus and Rabobank had no current plans to issue a government-guaranteed retail product for deposits above $1 million. RaboPlus deposits under $1 million are covered by the government guarantee at no cost. Rabobank's ultimate parent, Rabobank Nederland, has no intention of asking for government support either".
"Our customers also acknowledge RaboPlus's security as their deposits are backed by Rabobank Australia Limited's own AAA rating and financial strength, the only ADI in Australia offering deposits to retail investors with an AAA credit rating. This makes it difficult for us to justify passing on to clients an additional fee on deposits over $1 million for a guarantee," he said.
The Federal Government is guaranteeing the retail deposits of all authorised deposit taking institutions (ADIs) under $1 million at no charge, but AAA to AA- credit rated ADIs will be charged 70 basis points, if they elect to extend the guarantee to deposits over $1 million. Institutions with ratings of A+ or lower will have to pay up to 150 basis points to offer the guarantee.
Mr McAweeney said it was likely that banks which chose to pay for the guarantee would pass the charge on to customers either directly or indirectly.
"As the threshold applies per depositor per institution, people with deposits over a million will simply spread their deposits across many banks to avoid the extra charges," he said
"We believe retail customers should consider a bank's credit rating, transparency on rates, fees and charges, withdrawal restrictions and online security."
Mr McAweeney said Rabobank Nederland, which guarantees the liabilities of Rabobank Australia Limited, had performed well during the recent global financial turmoil and recently reported strong interim results for 2008, which showed a 12 per cent increase in pre-tax profits and a tier-one capital ratio of 11.2 per cent. In fact, Rabobank Nederland's tier-one capital places it among the world's 20 largest financial institutions.
In addition to this, Mr McAweeney said that as a cooperative, Rabobank Nederland also does not have any public shareholders.
"As such, it is not subject to pressures to achieve high quarterly returns, so it can operate its business with a long-term view that takes into account the best interests of the bank and its clients, he said.
RaboPlus is the online savings and investment service which was launched by Rabobank Australia Limited in 2007 offering a range of saving account, term deposits and managed funds options which can be used as part of a diy super plan.
RaboPlus and related deposit products are issued by Rabobank Australia Limited ABN 50 001 621 129, AFSL 234700. Read the Terms and Conditions at raboplus.com.au when deciding if they are appropriate for you to acquire or keep.
Rabobank Australia Limited is rated triple-A (AAA) by Standard & Poor's Ratings Services. Ratings are subject to change. Latest ratings at standardandpoors.com. Ratings are solely statements of opinion, not statements of fact or recommendations to make any investment decisions.
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