Sophia Rodrigues reports on some unusal moves from the banks in the term deposit rates space.

The rate war among banks in the deposit rate space is now spreading to the finance companies with PGG Wrightson Finance reacting to Fisher & Paykel Finance’s hikes two weeks ago.

The value of a key business of South Canterbury Finance will be known in coming weeks or months as receivers for the company put the company’s plant and equipment lending business for sale.

Rabobank via RaboDirect seems determined to leave competitors way behind in the term deposit space, especially for terms up to one year.

ASB Bank lost 10 basis points in market share for retail deposits in the six month period to December 2010 compared to the year earlier despite the bank continuing to offer highly competitive investment rates.

The week past saw some major rate changes in the non-bank deposit-taking space in what seemed to be a tussle between two equally rated finance companies.

There was a lull in the term deposit space last week with no institution announcing any change to the interest rates.

Non-bank depositors are now operating under stricter rules now the Reserve Bank has prudential supervision of the sector. Sophia Rodrigues looks finds out how each company has changed its trust deed.

FE Investments raised its one-year term deposit rate by 18 basis points to offer the highest rate of 10.18% for this term. The finance company is calling it spring rate special to mark the celebration of Chinese New Year in February and the rate is applicable for deposits over $5,000.

The Reserve Bank has announced a formal limit on covered bond issuance, confirming the 10% limit that it had flagged in the consultation document.

The past month has been quiet on the deposit rate front after a hectic period of intense competition in the short-term space.

Even as the short-term deposit rate space remains very competitive, banks continue to wax and wane with interest rates.

It was a relatively quiet week on the deposit rate front but one that still saw TSB emerging as the market leader for the first time in many months.

After a week’s breather, short-term deposit rates from banks came under focus once again but this time it is for a short period.

The Reserve Bank of New Zealand granted three key exemptions to UDC Finance from the new regulations applicable to non-bank deposit takers that came in to effect on December 1.

Equitable Mortgages became the first non-bank deposit taking company to collapse in to receivership during the extended guarantee period despite the company making efforts to restructure to meet increased regulations.