# Rabo Ignoring ECB Rate Increase ???



## Lightning (27 Jul 2011)

Rabo decided to make a wee song and dance about how they were matching the ECB rate increase the last time around. [broken link removed]



> From the very beginning, we said we’d offer Irish savers a straightforward, no-nonsense, no-strings-attached savings product that gives you instant access to your money when you need it without penalties. Almost six years on since our launch in the Irish market and we’re continuing to do just that. From the start, we also said we’d strive to offer competitive rates and today’s announcement of our interest rate increase shows that we are continuing to deliver on that promise.



Rabo were also very quick to match ECB rate decreases previously. 

So, is Rabo going to do the right thing and increasing payments to their variable customers in line with the latest ECB increase? or are they ignoring it and pocketing the difference?

I think Rabo, who market themselves as an honest bank, deserve some scrutiny in this regard.


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## callybags (27 Jul 2011)

Pocket what difference?

Serious question by the way.


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## Lightning (27 Jul 2011)

RaboBank Netherlands put your RaboDirect deposits into investments and use the deposits to fund loans. When the ECB rate goes up they get a greater return on their loans and their money market investments. A return that an 'honest' bank would pass on to their variable rate customers in line with the central bank increase. If they do not pass on the increase, they increase their margins and pocket the extra profit at the customers expense.


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## Godfather (27 Jul 2011)

Guys, put yourself in their shoes: if business is going well in Ireland why having to increase the rate? They don't want more customers, that's a clear signal... They are ok as they are... They prefer to reward stock-holders, I guess that's rule of market... Their AAA rating gives them power here...


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## dublin27 (27 Jul 2011)

Rabo are taking advantage of being 'safe' with their very low rate of interest.  Had an account with them initially but think there are better options in the market.  AAA is not required for security.


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## swervedriver (28 Jul 2011)

CiaranT - thanks for pointing this out.

The Rabo rate is, I believe, below the rate of inflation so not increasing it is going to hurt depositors. What's the point in the ECB raising the rate if the banks just take it in profit? Maybe I'm being too simplistic.


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## Bobby1 (28 Jul 2011)

With eveyone running around talking doomsday about Irish banks and pulling funds and moving them into the likes of Rabo bank, why would they increase the rate? They know they will get custom regardless, as most customers to them are more security then rate driven, and so hence why they pocket the 0.25% extra margin.

They are a business at the end of the day...Im not suprised they havent increased rates...as long as people keep speculating over the Irish Economy, large suitcase bankers like Rabo will keep creaming it


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## seesaw (28 Jul 2011)

dublin27 said:


> Rabo are taking advantage of being 'safe' with their very low rate of interest.


True and this is more example of them taking advantage of that. But as many people have realised if Ireland goes bellyup and out of the euro then these Rabo savings will most likely become a new currency too. A lot of people however don't know this and think having money in an Irish Rabo is like having money in an Amstedam Rabo.


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## swervedriver (29 Jul 2011)

Capitalise the profits, nationalise the losses.

I have a lot of money in Rabo (Ireland). Ireland isn't going to go out of the Euro for quite a while (at least two years). It would, at the very least, require a referendum (barring some bizzare tanks on the street situation, despite our non-existant army). This isn't the case in most countries - it is in Ireland. Until there's talk of such a referendum, it doesn't really matter what country is holding your Euros. Even Germany, France etc forming their own Super-Euro would be breaking the terms of the Maastricht treaty and would require a new treaty of Europe. Such events will be well flagged up. People who talk about the demise of the Euro often don't think about the mechanics of such a break-up. I honestly think there's a lot of hysteria about the Euro (which is a very flawed currency, granted) and I think a lot of it comes from the UK. I would welcome any counter arguments.


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## pator (29 Jul 2011)

So far are AIB the only ones to increase their rates for lump sum desposit accounts? 

And at that they dont seem to have increased the rates on the old ANGLO accounts?


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## Lightning (29 Jul 2011)

pator said:


> So far are AIB the only ones to increase their rates for lump sum desposit accounts?
> 
> And at that they dont seem to have increased the rates on the old ANGLO accounts?



AIB, have been the most honest bank, by a country mile, with the ECB rate increases. They hiked the rate on a lot of their products but not all the AIB Direct products. 

All the banks have played games with customer rates. They have mainly hiked rates on new products but not on existing products. For example, Leeds and BoI hiked the rates significantly on new products, like the ICS and 90 day call account products but left other products untouched. 

PTSB have hiked rates for new term deposit products but left variable rate products untouched. 

Nationwide UK & Ulster & others like 'honest' RaboDirect/AccBank have turned a total blind eye to the rate increase thus far.

In general terms, Consumers should be earning 0.50% more on their deposits than a few months ago.


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## Lightning (29 Jul 2011)

Case in point ... RaboBank hiked their ACCBank home loan rate AER up 26 bps this month, but left their ultra low ACCBank deposit rates untouched. Hence, RaboBank profits at the expense of their depositors. How is this 'honest' banking by RaboBank?


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## Bobby1 (29 Jul 2011)

Fixed savings and variable savings are priced not all priced off ECB base rate, so its not correct to state consumers are losing out on .50% on their interest rates. True some accounts this is the case, but fixed deposits in most institutions are benchmarked against EURIBOR rates, which have had very little change in the last few weeks, and are well below the current deposit rates...current 12 month EURIBOR is 2.18%...AIB paying 3.95%, do the math!

Everytime ECB goes up, its not feasible nor sensible to expect every deposit rate to increase, firstly we need to have banks with the ability to make some margin, and secondly ECB changes are not applicable to all savings product types

As long as banks are making negative margin on most of their deposits- fixed term savings, they will seek margin anywhere they can to off-set it, and variable rate products are their target.

Im not trying to stick up for banks, but even in Rabo Banks case, their demand deposit is above ECB rate, so they are still paying over the odds... how can you expect this to continue indefinitely? 

The only reason banks keep hiking term deposit rates is because its their only source of funding...variable rate products are not secure retail funding on balance sheets as its not "locked in" like a term deposit. 

my view anyways...!


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## farmerette (30 Jul 2011)

seesaw said:


> True and this is more example of them taking advantage of that. But as many people have realised if Ireland goes bellyup and out of the euro then these Rabo savings will most likely become a new currency too. A lot of people however don't know this and think having money in an Irish Rabo is like having money in an Amstedam Rabo.


 

correct


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## farmerette (30 Jul 2011)

swervedriver said:


> Capitalise the profits, nationalise the losses.
> 
> I have a lot of money in Rabo (Ireland). Ireland isn't going to go out of the Euro for quite a while (at least two years). It would, at the very least, require a referendum (barring some bizzare tanks on the street situation, despite our non-existant army). This isn't the case in most countries - it is in Ireland. Until there's talk of such a referendum, it doesn't really matter what country is holding your Euros. Even Germany, France etc forming their own Super-Euro would be breaking the terms of the Maastricht treaty and would require a new treaty of Europe. Such events will be well flagged up. People who talk about the demise of the Euro often don't think about the mechanics of such a break-up. I honestly think there's a lot of hysteria about the Euro (which is a very flawed currency, granted) and I think a lot of it comes from the UK. I would welcome any counter arguments.


 

more chance of a federal euro with one finance minister than the euro breaking up


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## oldnick (30 Jul 2011)

SWERVE DRIVER - I note that nobody has seriously argued against your belief that the Euro will not break up.

I had asked a similar question in another thread ("default-what now ?") where I argue that there is little point in people taking money out of Ireland into either sterling or euros in germany and other NW European states. Besides the pointlessness of this exercise it is dangerous for the economy.

I would welcome -almost plead -with the experts in this field to put forward a cogent argument as to why it makes sense for the Irish to put their savings abroad.

Fortunately, as per Central Banks report yesterday, the capital flight has greatly eased, and so far relatively few Irish depositors have joined the rush to deposit money abroad.Except , presumedly,AAM posters.


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## farmerette (30 Jul 2011)

oldnick said:


> SWERVE DRIVER - I note that nobody has seriously argued against your belief that the Euro will not break up.
> 
> I had asked a similar question in another thread ("default-what now ?") where I argue that there is little point in people taking money out of Ireland into either sterling or euros in germany and other NW European states. Besides the pointlessness of this exercise it is dangerous for the economy.
> 
> ...


 
i had money with hsbc from last november , had a sterling and a canadian dollar account , have brought all my money back and closed both accounts , in terms of wealth preservation ,  from now on its rabbo bank + gold


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## dec1892 (30 Jul 2011)

farmerette said:


> i had money with hsbc from last november , had a sterling and a canadian dollar account , have brought all my money back and closed both accounts , in terms of wealth preservation , from now on its rabbo bank + gold


 
honest question, I have cash, what is the easiest way going about actually buying or investing in gold?


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## farmerette (30 Jul 2011)

dec1892 said:


> honest question, I have cash, what is the easiest way going about actually buying or investing in gold?


 
ring goldcore , they have many gold and silver based products , you can buy and keep , buy and have it stored or choose whats called the perth mint , this is unallcoated gold , a cert , its 2% cheaper to buy than physical , very handy if you want to offload gold quick 

01 6325010


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## Lightning (31 Jul 2011)

oldnick said:


> Fortunately, as per Central Banks report yesterday, the capital flight has greatly eased, and so far relatively few Irish depositors have joined the rush to deposit money abroad.Except , presumedly,AAM posters.



Eased, yes. Gone away, no. 9 billion EUR was taken out of Irish banks in June 2011, not a small figure in an Irish context. The pre-amble to bailout II or the implosion of Spain could quickly change that.


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## marksa (1 Aug 2011)

CiaranT said:


> Eased, yes. Gone away, no. 9 billion EUR was taken out of Irish banks in June 2011, not a small figure in an Irish context. The pre-amble to bailout II or the implosion of Spain could quickly change that.


 
7.50bn was taken out my rest of the world resident, so 1.5bn from euro zone, or Irish resident is a relatively small drop in the deposit book


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## Troy McClure (5 Aug 2011)

Was told by rabo rep that rate is increasing monday by .15% to 2.4% from Monday. So they are holding back on .1% for themselves.
When challenged on this the robot on the other side of the phone read from whatever material that was in front of her explaining thats it's not a tracker rate and there was no imperative to pass anything on. There was little sympathy for any argument of principal in the matter, but she did explain Rabo's AAA rati.... yadayadayada..
Time for other options me thinks as the 'nice' bank are really not so nice. I am turning to CiaranT's point of view on this.


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## Lightning (6 Aug 2011)

Thanks for the information Troy and fair play to you for putting pressure on 'honest' RaboDirect to pass on the rate increase. It is a shame that they are creaming some of the ECB rate increase for themselves and not passing on any of the rate increase for their AccBank customers.


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