PGG Wrightson Finance announced the 2009 financial year was a "stellar year", with before tax profit of NZ$10.1 million up from NZ$8.4 million in 2008. It also suggested it may not join the extended retail deposit guarantee scheme, saying it hoped the new Reserve Bank-led regulatory scheme would be robust enough to give investors confidence. "The core profit improvement this year has been significant, and after the costs associated with the Deposit Guarantee Scheme ($1.4m) and increased provisions taken ($2.9m) we still achieved a record result, achieving over $10m net profit before tax for the first time," head of PGG Wrightson Finance Mark Darrow said. "It has been a very busy year for the Company. As well as coming to grips with the introduction of significant new Non-Bank Deposit taker legislation and regulations, assets under management grew by $88m, or $16.3% to $631m, while debenture funding increased $48m to $221m." "The result was underpinned by a 23% increase in NIM (net interest margin) for the year while operating expenses were kept at the same level as the prior year. Fee revenue was also significantly enhanced on the prior year." "PGG Wrightson Finance will be ready to opt-in to the Government's extended Deposit Guarantee Scheme next year, but a final decision will be made in 2010 when the Company reviews confidence in the market prior to the Scheme commencing on 13 October 2010." "We will certainly plan accordingly to keep this option open. We would also like to think that banks and the stronger finance companies will be able to provide sufficient investor confidence so that the Deposit Guarantee Scheme is no longer required which in any event will likely be the case from 2012. We believe that the new environment with Finance companies coming under the regulatory framework of the New Zealand Reserve Bank is robust enough in its own right to give investors confidence in the broader financial sector by the time the extended scheme comes into play."
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