Another downer at Hubert, 06 AUG 2020 | Hubert Financial | Discussion forum

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Another downer at Hubert, 06 AUG 2020
August 5, 2020
6:33 pm
Loonie
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New rates are as follows:

Daily savings - 1.60%

1-year term - 1.70% average

2-year term - 1.75%

3-year term - 1.85%

4-year term - 1.90%

5-year term - 2.00%

August 5, 2020
8:28 pm
Dean
Slocan Valley, West Kootenays, BC.
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.
It's a 'Race' to the Bottom ... wherever that is sf-confused

How Low with they go ❓❗

sf-cool " Live Long And Prosper " sf-cool

August 6, 2020
7:15 am
rhvic
Victoria, BC
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Dean said
.
It's a 'Race' to the Bottom ... wherever that is sf-confused

How Low with they go ❓❗  

Well let's see: the major banks are zero to 0.05%, Tangerine is 0.20%, etc.

August 6, 2020
12:24 pm
Dean
Slocan Valley, West Kootenays, BC.
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rhvic said

Well let's see: the major banks are zero to 0.05%, Tangerine is 0.20%, etc.  

The Major Banks and the likes of Tangerine are Not comparable to the FI's that we focus on (here on this site), that have 'Real' HISA's & HIGIC's.

Try again.

    Dean

sf-cool " Live Long And Prosper " sf-cool

August 6, 2020
1:31 pm
AltaRed
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Those with a more intimate knowledge of the banking system may have a more clear crystal ball but I would use NIM (Net Interest Margin) trends to make a guess.

Home Capital Group just released their Q2 results https://web.tmxmoney.com/article.php?newsid=8318094955022163&qm_symbol=HCG and NIM actually increased to 2.4% this past quarter from 2.38% Q1 and 2.09% for Q219.

Taking that as representative (and it may not be), it likely suggests current Oaken and Home Trust deposit rates may be a good reference point for what may continue for the rest of the year. Just my WAG. YMMV

August 6, 2020
2:21 pm
Loonie
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This is interesting but I don't know how to interpret it. Are you saying that an increasing NIM means rate stability, or what?
I have no idea what your acronyms mean.

August 6, 2020
3:22 pm
AltaRed
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Loonie said
This is interesting but I don't know how to interpret it. Are you saying that an increasing NIM means rate stability, or what?
I have no idea what your acronyms mean.  

Sorry about the acronyms that I use elsewhere.
WAG = Wild A**ed Guess
YMMV = Your Mileage May Vary

Regarding my comment on NIM, my assumption is that if Home has been able to hold, or increase, its NIM over the past year, it is not suffering margin compression. Further given its mortgage originations (and outstanding loans generally) are holding steady to increasing, the mortgage interest rates it is charging are competitive. There is thus no overt pressure for Home to then decrease what it offers on deposit rates.

Best I can tell, NIM in the 2% range is quite acceptable in their line of business. NIM is a measure of profitability and in Canada, it has been in the range of 1.5-2% https://fred.stlouisfed.org/series/DDEI01CAA156NWDB

August 6, 2020
3:52 pm
Loonie
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Thanks for the explanations.

Without any serious competition for depositor rates, there doesn't seem to be any motivation for them to increase. at Oaken.

August 6, 2020
4:46 pm
AltaRed
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Loonie said
Without any serious competition for depositor rates, there doesn't seem to be any motivation for them to increase. at Oaken.  

I believe that is wishful thinking. No one wants to pay more than they have too unless they are startups looking for a market position like LBC did initially. The question in post #2 was 'how low can they go'? I am suggesting with my amateur guesswork deposit rates won't go much lower given HCG as one example. They had a healthy quarter.

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