Value Packs / Banking / Deposit-Cost & Beta Sentinel / Wisdom
Which deposit segments are paying more for their money than we planned this month, and how much balance sits behind each?
NWhere we are paying more than planned
IN A NUTSHELL
Three segments cost more than planned. Corporate Non-Operating is furthest — 4.82% against a planned 4.15%, 0.67 points more — on a $6.40B book. Corporate Operating pays 0.21 points more on $4.10B and Small Business 0.11 points more on $2.30B. Retail Core and Affluent Uninsured both cost less than planned. Corporate Non-Operating is the third largest book here and the most expensive gap, which is $42.9M of interest above plan.
Rate paid against rate planned, by segment, this month
Each segment is read against its own planned rate — Retail Core is planned at 2.25% and Corporate Non-Operating at 4.15%, so the two gaps are not comparable as percentages on their own.
Retail Core is the biggest book on the page at $8.90B and costs 0.13 points less than planned, which is $11.6M of interest saved. Set against the $54.0M the three expensive segments cost above plan, the whole book is $40.9M over.
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How has the rate we pay Corporate Non-Operating moved month by month against plan?
NOne month above the range, and it is November
IN A NUTSHELL
The rate sat inside its expected range every month from January to October, moving between 3.95% and 4.25%. November is the first month above it — 4.82% against an expected 4.15%. The step from October to November is 0.75 points, against a largest ordinary month-to-month move of 0.23. On a $6.40B book that one month is $42.9M of interest above plan.
Rate paid against the range expected of it · Corporate Non-Operating
The range is rebuilt each month — a rate above the top of it is money we are paying that this month’s own history did not expect us to pay.
The ten months to October sit either side of what was expected by at most 0.11 points. November is 0.67 above — six times the furthest any earlier month strayed, and the only one outside the range.
Wisdom noticed
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Which deposits is the extra interest being paid on?
NAlmost all of it is the twelve-month book
IN A NUTSHELL
Of the $42.9M paid above plan, $24.6M is on twelve-month deposits — 57% of it. Six-month adds $10.8M and three-month $5.1M. Everything shorter is $2.4M between them. The twelve-month book is $2.80B of the $6.40B total, so it holds 44% of the money and carries 57% of the extra cost. It is also the longest-dated of the four, and the last of them to reprice.
The $42.9M of interest above plan, by the deposits it is paid on
The four pieces sum to the whole amount above plan — each is a balance multiplied by the difference between the rate paid and the rate planned.
Twelve-month deposits pay 0.88 points above plan on a $2.80B book — the widest gap and the largest balance of the four. Six-month pays 0.54 points above plan on $2.00B. Those two alone are $35.4M of the $42.9M.
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Put the monthly funding-cost report together.
NThe report lists every deposit segment and tenor paying more than it was planned to, with the balance behind it, the rate paid, the rate planned and the interest that difference is worth over a year. One row per segment and tenor.
funding_cost_above_plan_november.xlsx
One row per segment and tenor, sorted by interest above plan. Eleven months of rate history behind each row.
44 KB · 35 rows · 5 segments · 7 tenors
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