'A lot of people think the crisis is over ... (but) it isn't back to normal,' Gail Kelly, who heads Australia's No.3 lender, said at a business lunch. 'We can well expect the ripple effects and ongoing factors to change the business environment from what it was before the crisis. So the challenge is actually continue into this new environment,' Kelly said.
While the world has limped back from worst economic crisis in 80 years, uncertainties remain. The U.S. economic recovery is fragile and sovereign debt risks are looming and hurt sentiment.
Kelly said it remained expensive to raise funds, which is a particular difficulty for Australia's banks as they lean on offshore funds to service growth.
Banks are competing hard for retail deposits and are offering a record high rates of as much as 7 percent for some term deposits. The average term deposit rate is now about 6 percent, compared to the official central bank rate of 4.25 percent.
In March 2008, when the central bank cash rate was 7.25 per cent, the one-year term deposit rate was 6.6 per cent.
Wholesale borrowing costs are about 7 times that of the pre-crisis levels, though they have slipped in recent times from about 10 times higher.
Westpac, shares were 0.3 percent lower at A$27.74. The benchmark index was 0.7 percent lower.
(Reporting by Sonali Paul; Editing by Balazs Koranyi)
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