Wholesale Deposit

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Wholesale Deposit

A deposit at a bank made by an institutional investor, a large business, another bank or an investment vehicle such as a mutual fund or pension. Wholesale deposits are usually large amounts of money, and wholesale clients are sometimes prioritized more highly than individual customers.
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NewBridge Fintech Solutions is a DIFC-based Fintech company which has created a global marketplace for wholesale deposits (www.deposit-book.com), connecting Banks with corporate and institutional depositors through an online platform.
As part of its strategy, the bank has gradually increased the share of retail deposits at the expense of wholesale deposits, which has been supportive of the net interest margin.
Oil price weakness during 2015-17 reduced the revenue of large bank depositors, including government-related issuers and large corporates, thereby increasing the cost of wholesale deposits from such large depositors.
Oil price weakness during the 2015-17 period reduced the revenue of large bank depositors, including government-related entities and large corporates, thereby increasing the cost of wholesale deposits from such large depositors.
The rating agency's standard assumptions, which are applied to Unipol Banca, assume residual tangible common equity of 3% and losses post-failure of 8% of tangible banking assets, a 25% run-off in junior wholesale deposits, a 5% run-off in preferred deposits, and a 25% probability of deposits being preferred to senior unsecured debt.
There was also a 59% increase in retail deposits to Au509.8mn and 53% in wholesale deposits to Au31.7mn.
The report evaluates how G-SIBS may meet the minimum proposed requirements including the possibility of using long- term wholesale deposits as TLAC and the impact on debt issuance.
"Given the nature of Abil's wholesale deposits, which are largely from institutional investors, we believe that the regulators are treating these investors as more akin to senior debtors than would have been the case for retail depositors," it said.
Among banks dependent on wholesale deposits, Yes Bank Ltd jumped 22.4 per cent while Indusind Bank Ltd) rose 5.4 per cent.
The rating agency said the outlook reflects the sluggish operating environment which will weaken asset quality and increase provisioning needs; the banks' sizable holdings of sovereign securities, linking bank credit profiles to that of the government of South Africa (B1 negative); and, funding challenges due to reliance on short-term wholesale deposits.
"If you have a very strong balance sheet, investors will have confidence in placing money whether as wholesale deposits or investing in instruments issued by the bank or even taking up shares in the bank, and with those resources we would then be able to invest in projects in the country.
uCaCBUAE could tweak the treatment of wholesale deposits.
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