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This blog is brought to you by Gilbert & Samuels Company Limited, a financial advisory services and consulting company based in Suva, Fiji.
To contact the authors of this blog, please call telephones (679) 3342719, (679) 3544897 or e-mail info@gilbert.com.fj.


Friday, June 26, 2009

Bank South Pacific interested in buying Colonial National Bank in Fiji

Bank South Pacific (BSP) has indicated an interest in buying Colonial National Bank's (CNB) operations in Fiji. This occurs although CNB was not actively looking for a buyer.

BSP is a Papua New Guinea owned commercial bank which first made inroads in Fiji by buying Habib Bank's Fiji operations. It is said to be the largest commercial bank in Papua New Guinea.

In recent years, BSP has undertaken an expansion into the Pacific region. It acquired the National Bank of the Solomon Islands in 2007 and also has operations in Niue.

Colonial National Bank is owned by Commonwealth Bank of Australia.

The necessary due diligence process is being undertaken where the business will be analysed and a review made of the accounts, records and processes of CNB by BSP. This process will take about four to six weeks.

Bank acquisitions in Fiji require Reserve Bank of Fiji approval.

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Tuesday, June 23, 2009

Reserve Bank changes Offshore Insurance Placement Policy

The Reserve Bank of Fiji announced a change in its policy on offshore placement of insurance business effective from 1 July 2009.

The new policy does not require those intending to buy insurance offshore to provide multiple quotes from the domestic market prior to applying to the Reserve Bank for approval.

The review by the Reserve Bank was said to help in simplifying the approval process for buying insurance offshore.

Insurance may be bought offshore in the following circumstances :
  • where a particular insurance cover is not available locally;
  • where the insurance premium for an offshore insurance cover is less than 15% of a similar cover obtained in Fiji; and
  • where it is in the public interest to buy an insurance cover offshore.
My Observations

Over the years, I would assume that the first two of the instances noted above have generally been the primary reasons for purchase of insurance offshore. However, the third ground on which insurance may be bought offshore appears to be of interest at this particular time.

Given that insurance premium is a function of perceived future risk and past claims, it may appear that due to events happening in the domestic sphere, insurance providers may have raised insurance premiums by significant proportions. Added to this is the fallout from the global financial crisis from which most countries are suffering.

Companies in Fiji may use these reasons as justification to buy insurance offshore. Given that these companies serve members of the public, they can argue that they will be able to sell their products are a lower price, if they can reduce their costs by buying cheaper insurance offshore.

However, if that is permitted, then local insurers may stand to lose out on business that they would have traditionally had access to over the years.

In the long run, this may help correct pricing of insurance premiums as local insurers would have to re look at their pricing of products again for the Fiji market. Some might even be priced out of the Fiji market.

There are also some types of industries where it is in the public interest for them to buy insurance offshore. Some of these industries may include the health industry for certain types of covers, institutions that serve a public purpose for which cover cannot be adequately provided by local insurers, wealthy companies and individuals taking proactive risk management measures by buying insurance that better serves their needs offshore, are some that come to mind.

At these times, one would expect a rise in applications to be submitted to the Reserve Bank in this area. Given that, there should be a likely rise in approvals which would have a negative impact on Fiji's foreign reserves.

For information on our various consulting services, pls call our office on telephone (679) 3342719 or email info@gilbert.com.fj.

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Sunday, June 14, 2009

Westpac to reduce lending rates later this month

Westpac Banking Corporation Limited will reduce its business index lending rate by 1% and its variable rate on housing loans by 1.5% and its variable rate on investment property loans by 1% on 22 June 2009.

No reduction in deposit rates have been announced by the bank.

The reduction follows a lead taken by ANZ Banking Group Limited to reduce lending rates across the board by 0.5% by 1 June 2009.

These follow a policy directive taken by the Reserve Bank of Fiji in mid April 2009 requiring banks to reduce their weighted average lending rates to the levels they were as at end December 2008 and to cap their interest spreads (i.e. the difference between a bank's weighted average lending rate and it's weighted average cost of funds) to 4% within 3 months from mid April 2009.

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Westpac Interest Rates (updated 11.6.09)

Schedule of interest rates released by Westpac Fiji are as follows:
  • Business Lending Rate (effective 22.6.09) - 9.99%;
    Residential Property Loan (effective 22.6.09) : Variable Rate – 9.00%, 1 year Fixed Rate – 8.50%;
  • Investment Loan (effective 22.6.09) : Variable Rate - 9.50%, 1 year Fixed Rate - 8.50%;
  • Retail Term Deposits (effective 30.3.09) : 6 to less than 9 months - 2.25%, 9 months to less than 1 year - 3.00%, 1 year to less than 1.5 Years - 3.50%, 1.5 years to less than 2 Years - 3.75%, 2 years to less than 3 Years - 4.00%.

Interest rates are on a per annum basis and may be varied by the bank without prior notice.

Individuals and groups that need investment advice, or advice with regard to capital markets issues, can use our company, Gilbert & Samuels Company Limited. We also do strategic planning, business continuity planning and capacity assessment consultancies. Also contact us if you require investment portfolio management services.

Our contacts are: telephones (679) 3342719, (679) 3544897 or e-mail: info@gilbert.com.fj.

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Tuesday, June 02, 2009

No Change in Westpac Interest Rates

Westpac Banking Corporation's interest rates (effective 2.6.09) have been posted on this blog.

One can note that there has been no change to the bank's rates from those that were published a month earlier.

Of the three banks, ANZ, Westpac and Colonial National Bank (CNB), CNB has the lowest business banking index rate and lowest housing loan interest rates.

Housing loan interest rates are around the same levels for the other two banks, ANZ and Westpac.

With regard to deposit rates, Westpac and CNB pay similar interest rates for shorter term deposits while ANZ pays slightly lower than them. Deposit rates for the three banks converge at around 4% for terms from 2 years.

We do not have information for the two smaller banks, Bank South Pacific, and Bank of Baroda.

Note : For investment advice and portfolio management, pls call our office on telephone (679) 3342719 or email info@gilbert.com.fj.

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Westpac Interest Rates (updated 2.6.09)

Schedule of interest rates released by Westpac Fiji are as follows:
  • Business Lending Rate (effective 20.4.09) - 10.99%;
  • Residential Property Loan (effective 20.4.09) : Variable Rate – 10.50%, 1 year Fixed Rate – 8.50%;
  • Investment Loan (effective 20.4.09) : Variable Rate - 10.50%, 1 year Fixed Rate - 8.50%;
  • Retail Term Deposits (effective 30.3.09) : 6 to less than 9 months - 2.25%, 9 months to less than 1 year - 3.00%, 1 year to less than 1.5 Years - 3.50%, 1.5 years to less than 2 Years - 3.75%, 2 years to less than 3 Years - 4.00%.

Interest rates are on a per annum basis and may be varied by the bank without prior notice.

Individuals and groups that need investment advice, or advice with regard to capital markets issues, can use our company, Gilbert & Samuels Company Limited. We also do strategic planning, business continuity planning and capacity assessment consultancies. Also contact us if you require investment portfolio management services.

Our contacts are: telephones (679) 3342719, (679) 3544897 or e-mail: info@gilbert.com.fj.

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Monday, June 01, 2009

ANZ reduces lending rates and not deposit rates

The interest rates published by ANZ Banking Group Limited in Fiji effective 1 June 2009 shows that the bank has started to work on complying with the Reserve Bank of Fiji's recent policy for banks to reduce their weighted average lending rates to the levels they were as at end December 2008 and to cap their interest spreads (i.e. the difference between a bank's weighted average lending rate and it's weighted average cost of funds) to 4% within 3 months from mid April 2009.

The rates published by ANZ Banking Group Limited sees its deposit rates kept at the same levels as they were previously.

However, Colonial National Bank has not reduced both its lending nor deposit rates as seen in the rates that the bank published effective 1 June 2009.

Westpac Banking Corporation Limited is yet to publish its interest rates.

After it does, we will review its rates and comment on it.

Note : For investment advice and portfolio management, pls call our office on (679) 3342719 or email info@gilbert.com.fj.

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Colonial National Bank Interest Rates (Updated 1.6.09)

Schedule of interest rates released by Colonial National Bank are as follows:
  • Business Banking Base Rate – 9.20%;
  • Residential Property Loan : Variable Rate – 9.50%, 1 Year Fixed Rate – 7.50%;
  • Investment Loan : Variable Rate – 9.50%, 1 Year Fixed Rate – 7.50%;
  • Retail Term Deposits: 9 months - 3.00%, 1 year - 3.50%, 1.5 Years - 3.75%, 2 Years - 4.00%, 3 Years - 4.50%.

Interest rates are on a per annum basis and may be varied by the bank without prior notice.

Individuals and groups that need investment advice and investment portfolio management services, can use our company, Gilbert & Samuels Company Limited.

We also do strategic planning, business continuity planning and capacity assessment consultancies. Our contacts are: telephones (679) 3342719, (679) 3544897 or e-mail: info@gilbert.com.fj.

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ANZ Interest Rates (updated 1.6.09)

Schedule of interest rates released by ANZ Fiji are as follows:

  • Business Index Rate - 10.75%;
  • Residential Property Loan : Standard Variable Rate - 10.00%, 1 Year Fixed Rate - 8.50%;
  • Investment Loan : Standard Variable Rate - 10.00%, 1 Year Fixed Rate - 8.50%;
  • Personal Loans : Secured - 12.00%, Unsecured - 15.00%;
  • Small Loans : Unsecured - 19.50%;
  • Retail Term Deposits: 9 months to 1 year - 2.25%, 1 to 1.5 Years - 3.50%, 1.5 to 2 Years - 3.75%, 2 Years to 3 Years - 4.00%.

Interest rates are on a per annum basis and may be varied by ANZ without prior notice.

For investment advice and portfolio management, pls call our office on telephone (679) 3342719 or email info@gilbert.com.fj.

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