Trusteebanks would like Tree rein’

Press, 12 June 1986, Page 6

Trusteebanks would like Tree rein’

PA Wellington Trading banks expanding into the home mortgage market had enjoyed a drop in their funding costs that had been denied to trusteebanks, said the Trusteebanks Association’s executive director, Mr Clive Thorp. Mr Thorp’s comments came after the ANZ Banking Group and the Bank of New Zealand announced plans to expand their business in the home mortgage market. Both are aiming at new customers and people without savings histories with the trading bank. The trading bank moves are expected to put some pressure on trusteebanks, building societies, and finance companies which have been slower to lower their interest rates. Mr Thorp said trading banks had a 1.5 per cent drop in their cost funds when wholesale commercial money rates fell from 21 to 15 per cent in the last three months. This had been denied to trusteebanks which were not allowed by their statutes to participate in this market. Trusteebanks would have liked a free rein such as the trading banks

had had, he said. Mr Thorp said the ANZ’s move needed to be put into perspective. Its deposit base would be to about one third of the deposits held by trusteebanks as a whole and the Auckland Savings Bank alone with 35,000 mortgages was a bigger home lender than the ANZ with

its 20,000 mortgages. Trusteebanks placed 75 per cent of their funds in the housing market compared with about 15 per

cent by ANZ, Mr Thorp said.

Trusteebank Canterbury had more personal customers than the four trading banks in its area, he said.