Rates round-up: February 13
SCF case back in court; deposit growth to continue
Monday, February 13th 2012, 6:30AM
by Niko Kloeten
The two yet-to-be-named defendants in the South Canterbury Finance fraud case could have their name suppresion finally lifted tomorrow.
The case, brought by the Serious Fraud Office against five individuals associated with the failed financier, is due for another hearing tomorrow in the Timaru District Court.
Last month Judge Joanna Maze allowed name suppression to continue for the five accused until tomorrow's court hearing.
However, three of the five have since named themselves, including former SCF chief executive Lachie McLeod.
Former chief financial officer Graeme Brown and Timaru chartered accountant Terry Hutton have also had their name suppression removed.
The five face a total of 21 charges including theft by a person in a special relationship, obtaining by deception abd false statements by the promoter of a company.
The SFO also laid 50 charges against former SCF chairman Allan Hubbard, who died in September last year after a car crash.
Deposits to continue growing
New Zealand's biggest banks should be able to self-fund this year due to low demand for credit and continued growth in deposits, according to a new report by PwC.
According to PwC's latest edition of New Zealand Banking Perspectives, an analysis of the five majors financial performance, the banks' combined core earnings in 2H11 was $2.8 billion, up from $2.3bn for the first half of their 2011 financial years.
PwC Financial Services Partner Sam Shuttleworth said: "The uplift in the banks' earnings for the second half of their 2011 financial years has come off the back of a solid all round performance across the majority of the key profitability drivers, which reverses the trend seen six months ago, when there was limited movements across these drivers of profitability."
He said the Eurozone sovereign debt crisis could have an major impact on our major banks' net interest income levels given the cost of international wholesale funding is likely to increase unless the banks can pass on these costs to their borrowers.
"On a positive note and putting aside pricing pressures, the major banks in New Zealand have largely self-funded themselves since the second half of 2009. The banks have clearly shown they can attract retail funding to cover new lending.
"In addition, the focus by our New Zealand major banks in managing liquidity, combined with these strong results and solid capital base, underlines the strength of the New Zealand banking sector, something which the New Zealand economy will need over the coming years."
Shuttleworth said, "With the extended sunny spell seen since 2010 brought on by increasing net interest margins potentially coming to an end, the banks are looking at other levers to pull to continue their profit growth.
"Banks are preparing for a challenging environment by stepping up their focus on driving efficiencies and reducing costs. Efficiency strategies should allow banks to maintain their profit margins given limited credit growth and pressure on funding costs doesn't appear to be abating."
Niko Kloeten can be contacted at niko@goodreturns.co.nz
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