‘Rush accompanied fall’

Press, 8 July 1986, Page 29

‘Rush accompanied fall’

PA Wellington The recent fall in interest rates had been accompanied by a rush of depositors to place funds at the best possible rate, according to the chairman of First City Finance, Ltd, Mr David Johnson.

■ In a speech prepared 4lor delivery to yesterday’s annual meeting in Auck-

land, Mr Johnson said First City had had to choose between taking deposits which might prove in the near future to be too expensive, or let deposits go by on the assumtion that the company could pick up cheaper funds later.

"As things have turned out, we’ve done a bit of

both,” Mr Johnson said. In the last year or two borrowers had been hurt and the demand for money had slowed.

Car sales fell and there had been a reduced amount of hire purchase paper available from First City dealers.

But Mr Johnson said now was the time for depositors, rather than

lenders, to get hurt For people dependent on interest rates as a main source of income, a 6 per cent drop in interest rates meant an income drop of more than 25 per cent

For tije rest of this year, First City’s policy would be to continue to expansion in its particular section of the market. 1