Fat home deposits boost CBA coffers

by 17 Feb 2014
Tight lending criteria and soaring house prices have left first home buyers with no choice but to save up hefty deposits – and CBA is reaping the benefits.

The hard push to save for a down payments has been a major driver behind the $40bn  in new deposits picked up by the bank in the last year, CBA fund manager John Abernethy told The Australian.

“The first homebuyer is struggling to get a loan so they’ve got to get their deposit up,’’ said Abernethy.

Retirement and SMSF savings also accounted for a significant part of the deposit increase, he said.

“There’s an expectation of about $100 billion of increase in self-managed super funds over the last 12 to 18 months."

SMSFs also tend to have high levels of cash, usually deposited at banks, during the settling-in period between establishment and full investment in local and overseas equities and property, he said.

CBA chief executive Ian Narve announced last week half-year profits of over $4.27bn, while rebuking claims the big four bank’s receive an unfair advantages and security from the government.

CBA makes a margin of 2.14 per cent on its lending, overall.