For the first time in history a New Zealand finance company has been wound up with depositors receiving back every penny of their money plus all interest.
If that's not a one point seven billion dollar triumph for National I don't know what is. There are thirty thousand depositors who should remember on which side their bread was buttered when it comes around to election time.
That's what the headline and opening paragraph should read but you can count on the antique media being far away from reality. The last time anything similar happened was when NZI Bank was wound up by NZI Insurance group back in 1991 (I think) and every depositor was paid out in full. That was the first time in history a bank had been wound up without depositors taking a hit.
None of the so called professional financial reporters seems to have woken up to the fact that the gummint has taken in over $232 mil worth of deposit guarantee fees since the scheme's inception - with accrued interest now worth say $250 mil.
So when all the assets are sold and the gummint is repaid, there is every likelihood the deal will have cost the tax payer not one penny. In other words, there is enough income in the bag to offset a net loss of $250 mil. Funny how hard it is to find this odd little fact in the media.
It's interesting to note also that most of the non performing loans are said to be in the property development sector so Adolf scoffs at all the hysterical commentary talking about damage to the South Island's rural sector.
Damage, my arse. A few farmers who should never have been allowed to borrow in the first place will be sold up and their farms will continue to produce. That's as it should be and has always been - even when there were SMPs. Nobody seems to have stopped to ask the key question:-
How the hell can any farmer find himself unable to pay his interest bill when the dairy pay out is a staggering $7.10?
Sadly, one is forced to conclude that Hubbard is to finance as Crayfar is to dairy farming. Both in well over their heads.
The only question which remains unanswered for me is - how on earth did South Canterbury Finance manage to be accepted into the extended deposit guarantee scheme as recently as April this year? Who were the officials who carried out due diligence?