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Government Deposit Guarantee
Customer Information: Government Guarantee for Deposits
Updated 28 November 2008
Safety of Deposits
St.George Bank is one of the top 20 largest companies listed on the Australian Stock Exchange today. It is established, prudentially well managed and remains well capitalised. Furthermore, it is currently holding in excess of $40 billion in deposits from more than 2 million customers with assets of $125.8 billion and it has risk ratings by independent agencies such as Moodys and Standard & Poors indicating it to be a high quality company with low credit risk.
St.George itself is in a sound position with very good credit quality and no exposures to either domestic or US subprime lending.
St.George recently announced it had completed 40% of it's 2009 term funding and recorded a record cash profit result of $1,321 million, up 13.9 per cent from 30 September 2007. Below 40 per cent cost-to-income ratio; a 20 per cent growth in deposits; and a sound capital position, underpin the core strength of the organisation.
Measures that give us this confidence include:
- vigorous capital requirements such as the requirement to hold assets of a value greater than the total amount of our deposit liabilities;
- policies which ensure satisfactory liquidity management;
- the holding of good credit quality loans;
- controlled exposures; and
- sound risk management.
Adherence to these measures is overseen by the Australian Prudential Regulation Authority (APRA), which provides banks with their banking licences and ensures stringent prudential standards are maintained.
For the above reasons depositors of St.George should feel confident that their funds are in safe hands.
Government Guarantee for Deposits
The Treasurer announced on Friday 24 October 2008 that the Australian Government has decided to implement a threshold of $1 million on the government’s current guarantee of deposits. Amounts over this will be charged a fee if customers wish to receive the benefits of the deposits guarantee for amounts in excess of $1 million.
This change to the previously announced unlimited deposit guarantee will apply from 28 November 2008. Up until that date, all deposits and wholesale funding eligible for the guarantee arrangements will be guaranteed without charge. After that date, deposits and wholesale funding over $1 million will only be guaranteed if the relevant Government Guarantee fee is paid.
For deposits under $1 million, the Australian Government will continue to guarantee deposits for a period of 3 years from 12 October 2008.
What is Covered Under the Guarantee
The Government has advised the following types of Deposits are currently covered under the Deposit Guarantee for any amount, even if the deposits exceed $1 million:
- Separate mortgage offset accounts (with either 100% or partial offset) are covered. However, home loan accounts with a redraw facility are not included
- All standard deposit accounts (including Transaction accounts, online accounts, DIY deposit accounts and Term Deposits). However, Market linked investments such as Shares and Managed funds and life insurance are not included under the Government’s programme because they are not considered by the Government to be eligible accounts.
From 28 November 2008 amounts greater than $1 million will only be covered if a Government Guarantee fee is paid.
To find out more about the Government Deposit Guarantee call 1300 278 352, from 8am to 9pm, 7 days a week, or visit your closest St.George Branch or talk to your Relationship Manager.
View the Terms and Conditions Applying to your Government Deposit Guarantee
