August 20, 2009

Dark clouds and a silver lining

Hi

The tough times for finance companies are not abating just yet, as this week's Deposit Rates Newsletter highlights.

Marac, keen to evolve into a bank, has hit some speed bumps thanks to its downgrade to "sub-investment" grade junk bond status, a fate South Canterbury Finance has also suffered. We offer up an S&P analyst's opinion on the pair.

Meanwhile, St Laurence is releasing its annual accounts amid speculation it may be on the brink of receivership. "Sticking to its knitting" certainly seems to be paying off for Fisher and Paykel Finance, however.

But the silver lining of it all this week is suggestions from the Prime Minister that an extension of the government guarantee on lending may well be on the cards.

Also today ING has paid nearly $400 million to investors in its DYF and RIF funds, bolstering ANZ's term deposit book.

The other piece of breaking news is that Parliament's Commerce Select Committee is to have an enquiry into failed finance companies.

In the mean time, BNZ and Kiwibank have hiked their long term deposit rates and competition remains strong in the shorter term space.


News
Marac faces long road to bank status
Marac's aspirations of transforming into a bank have become difficult following its downgrade by Standard & Poor's last week, according to one of the rating agency's analysts. More

Westpac warns of waning rates
Although term deposit rates have risen recently Westpac is picking shorter duration rates will ease in the coming weeks. More

F&P Finance doing better than expected
Fisher & Paykel Finance managed to boost its revenue over the past year and avoid the trouble seen by some of its contemporaries by staying out of property development and sticking to consumer credit. More

BNZ and Kiwibank increase long term TD rates
The battle for term deposit money heated up some more this week with Kiwibank and Bank of New Zealand making significant increases to rates yesterday. More