Commentary

7th April 2008

The past week or so has been hectically busy with news stories relating to deposits and finance companies. There is a huge amount of competition for the investor dollar at the moment, and sometimes it seems like a slugfest between the banks.

While ANZ National Bank and BNZ have raised more than $1 billion through their bond offers we have seen ASB, last week, make big increases to its term deposit rates.

Added to that a couple of banks have rolled out cash PIEs recently.

All this competition is squeezing an already stressed finance company sector and looks to be spreading further. Today's story that TOWER is winding up its mortgage fund is yet another example of how the competition is claiming victims.

The thought of victims brings Lombard to mind. Our main piece of coverage on this is in Phil's Blog. Have a read and if you would like, post your comments at the end.

Regards,

Philip Macalister

New offers

This week in Money at Work we review the National Bank's new PIE compliant cash fund.

Phil's Blog

Learning from Lombard
The past week was always going to be a useful one to get a fix on the state of the finance company sector.
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News Update

Tower winds up $242m mortgage fund
Tower's $242 million conservative fixed interest fund is being wound up as it is uncompetitive under the new tax rules and faces a stiff challenge from banks.
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Nathans investors still in the dark
Investors in Nathans Finance are still unaware of how much of their money they will receive from the failed finance company which collapsed seven months ago.
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First Five Star payment not so starry
Five Star Consumer Finance investors area getting their first payment, however they have also been told they are likely to recover less of their investment than previously indicated.
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Hanover confirms profit
Hanover Finance has confirmed its audited profit before tax of $17.2 million for the six months to December 31 and says cash reserves at the balance date were "just over $80 million".
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