South Canterbury's cash drive pushing up all rates
S&P director of financial institutions ratings, Peter Sikora, says the Timaru-based financier, whose long-standing chairman Allan Hubbard stepped down from the board last week, is changing the market by forcing its rivals to try and match its rates.
"South Canterbury's got guaranteed deposits at 8%, and it has consequences for the wider sector," Sikora told a briefing in Wellington.
The competition for retail investors' cash has been the tightest it has ever been over the past year as banks vie with finance companies and savings institutions to bolster their funding after the global financial crisis sapped international credit lines, and government regulation forced them to source more money domestically.
Sikora said the most pressing issue for South Canterbury at the moment is its looming maturities in October, worth some $350 million, and that it needs to get through that before it can focus on its recapitalisation plan.
Click the button below to subscribe and will have free unlimited access for a limited time to full article and all other articles on the site.
You will also be able to comment on articles on Good Returns.
