7 February 2002
ASB Bank Matches Kiwibank 12 Month Home Lending Fixed Interest Rate
Statement made by Barbara Chapman, Head of Retail Banking and Marketing, ASB BANK Limited
ASB Bank will match KiwiBank’s pilot opening interest rate special of 6.1% per annum for a 12 month fixed rate home loan for Palmerston North and Hawkes Bay customers. While we believe interest margins at these levels are not sustainable for any bank in the longer term, we operate in an extremely competitive environment and will take an aggressive response to competitor initiatives of this nature, as we have in the past.
KiwiBank’s claims of innovative features such as free school banking; free banking for retired people; free banking for community organisations; free banking for home loan customers; free banking for students; no “honour” fees; and free internal transfers are hardly new however. ASB Bank has always offered transaction fee exemptions for younger and retired customers, and in fact more than 50% of our customers enjoy totally free or partially free transactional banking. Further, unlike some other banks, we have never charged “honour” fees.
Other details of KiwiBank products released today are as expected, and replicate many of the initiatives already offered by ASB Bank.
ASB Bank has been the service leader amongst New Zealand’s major banks for the past four years, and is recognised for providing superior service and good value for our customers - merits which will be hard for KiwiBank to replicate I suspect.
KiwiBank is tapping into the same group we identified last year, when our customer research told us some people wanted a low cost account option. Last November we launched our low cost product ‘Streamline’ for the high number of our customers who transact electronically. We have been very pleased with the high uptake. With no advertising or promotion Streamline is attracting a significant number of customers every month, and we’re delighted that 60% of them, each month, are new to ASB Bank.