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1. Adelaide Bank - no deposit products
2. Bendigo Bank - weak deposit products
3. Rural Bank - ONE Personal Saver 5.10%
Bank of Cyprus - Midas Account 5.50%
"REGIONAL lender Bendigo and Adelaide Bank will pay $130 million for the local arm of Bank of Cyprus Group, marking the European bank's exit from Australia."
"''It [Bank of Cyprus] is predominantly funded by retail deposits, maintains a conservative risk profile with 99 per cent of the loan book secured against property, and has an excellent credit history,'' Mr Hirst said."
http://www.smh.com.a...1216-1oyso.html
A merger among ADIs can catch you off-guard while trying to stay beneath the government guarantee of deposits limit.
The four brands have widely varying deposit product portfolios. I assume Bendigo and Adelaide Group bought Bank of Cyprus because they wanted those deposits. Bendigo and Adelaide Group had the choice of offering a competitive deposit product or buying Bank of Cyprus.
There is a catch. Bendigo and Adelaide Group assumes the Bank of Cyprus depositors are going to stick around after the merger. Bendigo and Adelaide Group fails to realise that depositors will reevaluate their commitments based on post-merger deposit rate outcomes.
I am curious how they will handle this since they have to rebrand the Bank of Cyprus products they bought:
1. Merge Bank of Cyprus into Bendigo Bank and drop the deposit rate.
2. Merge Bank of Cyprus into Bendigo Bank and keep the deposit rate.
3. Merge Bank of Cyprus into Bendigo Bank and raise the deposit rate.
4. Create a new brand for Bank of Cyprus under the Bendigo and Adelaide Group and keep the deposit rate.
One also has to take into account that Bank of Cyprus and Rural Bank are now housed under the same ADI and depositors with deposits in both entities may decide to ditch one or possibly both relationships.
Depositor Beware!
This post has been edited by sydney3000: 16 December 2011 - 09:28 PM
