Savings Institutions Support Deposit Guarantee

Draft media release

13 October, 2008

Savings Institutions Support Deposit Guarantee

The New Zealand Savings Institutions Association today welcomed the Government’s move to guarantee all savers’ deposits.

Ross Smith, chair of the association, and CEO of SBS Bank said: “We believe it is both prudent and sensible to reassure local investors who have become unsettled by the worsening international crisis, and to co-ordinate actions with Australia.

The New Zealand Savings Institution Association represents PSIS and the building societies, including: SBS Bank, Southern Cross Building Society, Nelson Building Society, Canterbury Building Society, and Heretaunga Building Society.

Mr Smith said “the associations’ members all intend to immediately opt into the New Zealand Deposit Guarantee Scheme announced by the Minister of Finance last night, and we welcome the opportunity to enter into a Deed of Guarantee with the Crown, and will be commencing this process immediately.”

The scheme will be free to all members of the association because the total retail deposits of each fall comfortably within the $5 billion level set.

Mr Smith said: “It is important that people understand that the New Zealand banking system remains sound. This move is designed to give further assurance to New Zealanders that their deposits are safe.

“The New Zealand Savings Institutions are even more protected from the international turmoil than most because we source our funding largely from domestic retail deposits and our lending is primarily first mortgage property lending over property in New Zealand. We are New Zealand owned and New Zealand funded.

“The association’s members have a history in New Zealand that cannot be matched by any other group in the financial services sector. We were the first to enable ordinary New Zealanders to own their own homes, have all been through depressions/share market crashes and our experience is great, with most of us having been collecting and lending money in New Zealand for well over 100 years,” Mr Smith said.

ENDS

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