Foreign exchange
Utilising a long established Australian Government initiative, Commonwealth Bank of Australia operates Australia’s pre-eminent Offshore Banking Unit (OBU). This initiative provides incentives to the Bank and our offshore clients to encourage the flow of international deals and ensure Australia remains a competitive and sustainable financial services centre.
Under the scheme, the OBU can provide more competitive pricing to our offshore clients thanks to the concessional income tax rate enjoyed by the OBU. In addition, offshore depositors enjoy an exemption from Australian interest withholding tax.
As a department within Commonwealth Bank of Australia (not a separate branch or entity), the OBU enjoys the Bank’s AA- credit rating* and is registered and regulated under Australian law.
Talk to us
For more information please:
- contact the OBU desk on +61 2 9117 0250
- email OBUDesk@cba.com.au
- Reuters Dealer code: CBAB
- View our brochure
Examples of how the OBU can help you
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Deposits
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An offshore depositor placing AUD50 million with the Bank’s OBU for 1 year at 5% p.a. receives interest of AUD2.5 million on maturity. No interest withholding tax is withheld by the OBU.
If the same deposit is placed with a non-OBU Australian Bank, the deposit would typically only receive interest of AUD2.25 million on maturity.
The difference of AUD250,000 is due to interest withholding tax of 10% being withheld by the Australian based bank (non-OBU) and paid to the Australian Tax office.
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Loans
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When assessing the required minimum return to the Bank on loan products, we build in the benefit of the concessional income tax rate (10%vs 30%) into our pricing models and can share this advantage with our clients. This allows us to better service our clients without diminishing shareholder value.
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We can assist with transactions for:
- Foreign Exchange
- Commodities
- Credit
- Derivatives
- Capital Markets
- Structured Products
- Trade Finance
- Guarantees/Letters of Credit
- Deposits and Loans
Important information
*S&P long-term rating (Outlook: stable) as at 01 December
2011
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