Store bank branches out

By PAULA OLIVER

The country's first supermarket bank is making its first move into transaction-based banking - but has not been greeted with open arms by the big four banks.

Superbank, a joint venture between Australia's St George Bank and Foodstuffs, opened in February offering just a savings account.

Chief operating officer James Munro will not reveal how many customers have signed on, but he is certain that its new product - a cheque account with an ATM card and competitive fees - will attract more.

The fledgling bank has had to cross hurdles just to be able to offer the new account.

Because it does not yet have any ATMs, Superbank had to negotiate with the big four - ANZ, BNZ, National and Westpac - to gain access to their networks.

One flatly refused, another took some time to agree, and the others imposed significant fees.

Munro said that was just good business on their part.

"We don't have any ATMs of our own, so we don't have any bargaining power at the moment. It's been interesting."

Because of the major banks' "good business", Superbank customers will be charged a $1 fee each time they use another bank's ATM.

Munro said customers would be encouraged to draw money from their accounts through Eftpos in Foodstuffs' supermarkets.

Superbank also has a phone and internet service.

Apart from the ATM charge, the new SuperAccess account is competitive on fees.

It has a flat monthly base fee of $7.99 on accounts with a balance higher than $1000, or $10.99 for below that figure.

Munro said customers were in charge of their own fees - they could choose whether they used ATMs, and therefore did not need to be charged.

Superbank would evolve from what he called a "banklet" to a full-service establishment in two to three years.

"We haven't been like other new entrants who have offered a full range of products in one go.

"Now we have an account with a much broader focus. It doesn't make us full-service yet, but it will be a different story."

Banking analysts labelled Superbank's arrival in New Zealand a "bold move".

In an already well-stocked market, the joint venture hopes to follow in the footsteps of successful British supermarket banking chains Tesco and Sainsburys.

Munro said the bank should become profitable in its third year.

Its savings account had drawn term deposit-type customers who wanted access to their money but a good interest rate.

As part of Superbank's evolution into a full-service bank, it would need to have a presence in Foodstuffs' stores, which include the New World and Pak'N Save chains, said Munro.

He stopped short of saying there would be staff in uniforms, but hinted that ATMs could be set up in stores, and perhaps other services.

Foodstuffs already has 73 ATMs in its stores - but they belong to other banks.

Perhaps they provide an opportunity to get one back on those major banks?

"We'll see," said Munro with a grin.