For years, the four majors have relied on almost $370 billion sitting in low or zero-interest customer accounts to cheaply fund their loan books and expand earnings. Those so-called “lazy deposits” have provided a deep, stable pool of funding that has acted like a protective moat around their business models. Macquarie is attacking that moat by aggressively pricing its savings products well above what the big four pay. If the incumbents respond by raising rates on those deposits to hold market share, the higher funding costs could feed directly into lower margins and weaker profit growth.
Analysts at UBS have run worst-case models showing how badly the traditional model could unravel if competitive pressure really bites. In their scenario, the majors face up to a 40% earnings hit if they materially reprice those large pools of low-cost deposits.
Jarden describes the $370 billion haul as money that millions of Australians effectively lend to the big four for almost nothing, highlighting how dependent banks have become on customer inertia. Macquarie’s push is testing exactly how much longer that inertia will hold when better-paying alternatives are just a few taps away.
