Reserve Bank cuts risk capital exodus for banks – AFR

A Reserve Bank cash rate approaching zero will push bank profits to multi-year lows and force more savers out of deposits and into riskier investments to generate a sufficient income, according to investors and analysts.

It is the growing anxiety of interest-starved depositors that could present the biggest challenge for the nation’s banks.

Andrew Papageorgiou tells the AFR ultra-low deposit rates were forcing savers to look beyond deposits to avoid drawing down on their capital.