Banks battle over one-year rates

Deposit Rates News Briefs; Latest interest rate changes, NZ Finance says flows good post Bridgecorp collapse, Asset Finance looks to rate, Creditors give Australian Bridgecorp directors a chance. Comment: Bridgecorp report amazing reading.

Monday, 6 August 2007

Four of the banks, plus Kiwibonds have made increases, as too have many of the big finance companies.

The bank action is centered around the one-year rate mainly, and the main condition is that these rates are for interest paid at maturity. For $10,000 the National Bank is offering 8.50%, Kiwibank 8.60% and ANZ 8.50%.

Rates for quarterly interest payments are around the 7.90% mark. Rabobank though has increased its one-year rate five points to 8.60%.

Kiwibonds, which are offered through The Treasury's Debt Management Office, increased its six-month, one and two year rates by 25 basis points each during the week. It is offering rates of 7.50%, 7.25% and 7.00% respectively for these terms.

In the finance company sector there have been numerous changes. Amongst the big companies UDC has increased its short-term rates (those up to nine months) by between five and 15 points, but dropped its longer term rates.

South Canterbury Finance has made changes to all maturities for secured debentures and unsecured deposits. The smallest changes were 15-point increases, however rates of three years or more went up 40 basis points.

Others to move during the past week include: Bastion Finance, Capital + Merchant, Equitable, Fisher and Paykel Finance, Five Star, Mascot, PGG Wrightson, Spiers, a number of credit unions plus SBS and PSIS.

NZ Finance says flows good
New Zealand Finance says that it has had a strong first quarter and that its investment business has experienced strong inflows.

"We've seen in the first three months of our financial year 15.9 per cent growth in our total assets to over $230 million. We have continued to receive the support of our depositors, financial planners and banking partners and this diversification of funding sources has supported our strong growth," chief executive John Callaghan says.

"We recorded our biggest collection of deposits within the last three months, the week after Bridgecorp folded. "

Asset Finance looks to rate
Asset Finance says it plans to get a credit rating before the government makes it mandatory.

"We welcome mandatory credit ratings and indeed any legislation that make's the industry a safer playing field for investors," company spokesman Noel Braden says.

Asset Finance will be working with one of the world's three leading credit rating organisations.

Braden says mandatory ratings will mean smaller finance companies are sold or merged with bigger players as they try to expand their book to gain a better credit rating.

Creditors give Australian Bridgecorp directors a chance
Creditors of nine of Bridgecorp's Australian companies have given the directors a chance to save the operations from going into liquidation. [MORE]

COMMENT: Bridgecorp report amazing reading
I have read – with a degree of amazement – the receivers first detailed report on the real state of Bridgecorp.

It's easy to sit here and say, with the benefit of hindsight, why would anyone have put money into this company? [READ ON...and have your say]

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