The major Australian banks’ share of domestic deposits fell during
2005, but they still account for almost two out of every three dollars
of non-bank deposits.

Bank deposits increased by $46.4 billion, or 7.1%, in the 12
months to November 2005, according to figures released last week by the
Australian Prudential Regulation Authority.

Under sustained pressure from high interest offers by regional and
international competitors, the majors captured just 40.3% of
the growth, which saw their share of the market slip from 66.7%
to 64.9%.

Only Westpac, which launched a high interest deposit product in
November 2004, matched system growth and the big loser was National
Australia Bank, which ended November 2005 with almost $600 million less
in deposits than a year earlier.

The major international players came close to matching their local
competitors, taking 36.5% of net new deposits and raising their
overall market share from 10.8% to 12.5%.

Remarkably, $11.7 billion, or more than one quarter of all net new
deposits flowed to local HBOS operations, although this includes $7.9
billion at HBOS Treasury Services, which became a locally licensed
deposit-taker in July 2005. HBOS-owned BankWest, which launched its
high interest TeleNet product in October 2004, saw a 23% increase, or $3.8 billion, in deposits over the year to November 2005,
although there is evidence of outflows in recent months due to
TeleNet’s 6% introductory rate falling to 5.5% after
12 months.

ING – a pioneer of high interest internet deposits – increased its book by $4.3 billion, or more than 23%.

The locally owned regional banks increased their share of non-bank deposits by $10 billion, or 10.3%.

St George saw net inflows of $4.2 billion, or 8.8%, over the 12
months, while Suncorp-Metway with $3 billion (14%) and Bendigo
Bank with $1 billion (11.1%) also saw strong growth.