Prometheus deposits guaranteed

In response to the substantial uncertainty that was developing in the international financial sector last year and in order to head off any "contagion" effect in New Zealand our government introduced a retail deposit guarantee scheme in the last quarter of 2008.

This scheme provides a government guarantee on retail deposits into any bank, finance company, building society or credit union that is accepted into the government's scheme. Prometheus was accepted into the scheme in late 2008 after going through the required assessment of our financial position to determine that we met the necessary conditions.

In New Zealand the dominant concern at present is in trying to predict the likely strength of the growing international recession and its potential impact on our economy. In any recession one expects the risk of loan default to increase and we have seen several of the larger banks announce increases in their "provisioning" to prepare for that.

Prometheus is in a good position to weather the current recession, with a diverse range of well-secured loans and a good capital buffer, however we felt it was prudent to join the government's scheme. Although scheme membership comes with costs which will reduce our profitability it offers all of our depositors considerable peace of mind as the New Zealand economy faces an uncertain path over the next two years.