Trust Bank charges

Press, 24 July 1987, Page 16

Trust Bank charges

Sir, — As an early depositor (late 19605) with Trust Bank Canterbury, I am disappointed at its latest scale of charges, effective from July 1. Now that the bank has attracted its clientele through its original concessions, the last two years have seen most of these benefits taken

away. It will be interesting to know how much the latest charges for cheque accounts, payments from budget accounts, etc., are expected to bring in and what the bank is going to do with the extra income. I was under the impression that Trust Bank was formed for the benefit of our community. With present cash reserves of nearly S27M and a probable profit of around SBM next year, can we expect a substantial Increase in “donations to the community”? — Yours, etc., M. ROBINSON. July 13, 1987.

[The general manager of Trust Bank Canterbury, Mr Frank Dickson, replies: “I acknowledge your correspondent’s claim that the last two years have seen budget and cheque account services, which were previously free, now being charged for. These years have also seen financial markets move from a tightly regulated and controlled regime towards a completely deregulated and competitive environment. The effect has been that competition, resulting from deregulation, has forced financial institutions to move towards a ‘user-pays’ philosophy and to recover some of the costs associated with providing banking services. This bank is little different from any other in the charges it has set, but it should be recognised that, unlike the others, it now pays interest up to 10 per cent on cheque account balances. Our retained earnings of $27 million are not as high as they should be, given our total assets, and in fact need to be increased if we are to meet the Reserve Bank’s requirements to become a registered bank. I assure your correspondent that we are ever mindful of our responsibility to the community. This year $500,000 of our profit has been allocated to grants, bringing our total to more than $3 million since the bank commenced in 1962. Provided our profits show an appropriate increase next year, we will be looking to increase the amount of our donation to the community consistent always with the need to increase our retained earnings to the appropriate level.’’]