Newlywed Banks Coy On Joint Accounts
Sydney Morning Herald
Wednesday July 5, 2000
It will be a while before Commonwealth and Colonial fully consummate their recent union.
When the Commonwealth Bank completed its takeover of Colonial on June 13, it created a $220 billion banking behemoth - Australia's largest. The new entity will also be the biggest funds manager, with a sizable insurance business. But for average customers clutching their ATM cards, passbook accounts and home loan application forms in the wake of the wedding, just what does all this mean? For the moment, very little.
Official advice posted on the Commonwealth Bank's Web site (www.commbank.com
.au/merger) reads: "Initially, you should continue to use your current banking and financial planning services ... No immediate changes to Colonial or Commonwealth Bank accounts are planned."
Looking further down the track as the merger is gradually bedded down, the picture is fuzzy.
The banks offer a broadly similar standard product range (see table, below) but there
are no details on what will be available eventually to customers.
The Commonwealth Bank's spokesman, Bryan Fitzgerald, says it is too early to make any decisions on future product offerings. But there are a few indications based on what each partner is bringing to the union.
Colonial's spokesman, Simon Morgan, says the most obvious spin-off for its customers is dramatically enhanced ATM access.
Colonial has a network of about 1,200 ATMs compared with the Commonwealth's 2,700, so the difference will be "massive". Customers can already use each other's ATMs without incurring those unpleasant "other bank" fees.
What about those who want or need to conduct their banking at a branch?
Fitzgerald says it will take up to six months before "systems integration" is complete, allowing Colonial customers to use Commonwealth branches. A two-year program of amalgamation will then take care of an estimated 250 overlapping Colonial and Commonwealth branches around the country.
"In any country town where a Colonial or Commonwealth branch is the only bank represented, that branch will be retained for at least five years," the Web site information reads. "In country towns, where an amalgamation of branches occurs during the two-year integration period, the amalgamated branch will be retained in that community for at least five years."
Greater access to a wider range of products is billed as being one of the benefits of the merger for both sets of customers.
The Commonwealth Bank will be able to deliver greater computer clout on the service side with NetBank, its Internet banking option, and Commonwealth Securities (ComSec), Australia's leading online share-trading site, which also offers access to margin loans and managed funds - including top performers from Colonial First State Investments.
The Commonwealth's Ezy Banking
(co-branded with Woolworths), which offers up to 50 free in-store electronic withdrawals and up to five free transactions outside stores each month, as well as a loyalty program, will be open to Colonial customers.
So is it wise to stay or go? Customers whose transaction banking needs are simple may find the answer still lies in details of the product mix yet to be unveiled. Until then, it's a case of "watch and wait".
A SAMPLE OF WHAT'S ON OFFER
Product Commonwealth Colonial
Home Loan* Economiser Rate Saver
Interest rate: 7.24% Interest rate: 7.20%
Min. $1,000 lump No. Min. lump
sum repayment sum repayment
Min. $5,000 Redraw facility available
redraw facility 1 July 2000
Monthly fee: $8 Monthly fee: $8
No est. fee Est. fee: $750
Home Loan* Home Equity Facility Viridian
Interest rate: 7.80% Priced off 90 day bank
bill #
Monthly fee: $12 Monthly fee: $8
Must pay interest No min. payment
fees & charges mthly requirement
* BASIC VARIABLE
** REVOLVING LINE OF CREDIT FACILITY FOR LOANS WITH TRANS CAPABILITIES
# REPRICED QUATERLY SOURCE: CANNEX, COMMONWEALTH, COLONIAL STATE BANK
© 2000 Sydney Morning Herald