PGC - Licenced to Bank

[percy]

Be careful Balance,I have a feeling Mouse may unload a few at $4.99.Not sure what price Logen ninefingers would sell.Maybe he falls in love with it and will not sell under $6.00.As the old saying goes "we are well positioned for the upturn"!!!!!!

[zigzag]

Balance - $5.00 per share? You must be talking looong term, or you're being a touch over-optimistic. I picked up 50000 during the recap. and would be totally beside myself if the price got to $5.00. Realistically, the only way PGC will get to $5.00 in the short/medium term is if they consolidate the shares ( a la NPX ) Long term - $5.00 would be nice. For the meantime, I feel quite comfortable/happy with my holding.

[macduffy]

What doesn't kill you makes you stronger

Isn't it curious how certain phrases seem to have currency from time to time.

Why, only a couple of days ago columnist Alan Kohler was saying the same thing about the Greece/Europe relationship!

[Dr_Who]

What's PGC competitive advantage over the other much larger and stronger banks? What covenants are in place to ensure that the promoters are not using PGC as their own piggy bank such as related party loans and moving their own assets at inflated valued into PGC?

[percy]

With GE money and others pulling out on NZ and Aussie banks looking towards Asia there is plenty of market for MARAC.I would think every one is now inside the tent peeing out,rather than some outside the tent peeing in.ie Ker's interests are now via PGC.As for paying too much and covenants time will tell.What we must remember is Ker saved PGC,put his money on the line,and brought in good staff who wanted to work for him.These same people have also put their money on the line buying PGC shares.Directors and management have a lot of flesh on the line.
This was a huge capital raising,that was underwritten.From what I heard a lot of Ker's contacts missed out, as shareholder take up of the rights was surprising, so they invested in torchlight.
The board is very strong and as I have noted have a large shareholding.Gould has put up a huge amount of money taking his holding from I think under 1% to 5%.Ker has attracted this backing.
I will be frank,I think the Aussies regard NZ as backward.This opens the door to NZ bankers. Life goes on and people with good ideas will want to borrow money,this is a fact of life.Cars ,equipment ,business expansion ,all need a NZ bank or strong NZ finance company.In fact NZ needs NZders backing NZ growth.Ker and his team seem to understand risk/reward.Shareholders in PGC didnot walk away.As well as MARAC we will see growth in the areas Ker has brought in.He has a proven record of funds management.Torchlight will not be for the weak willed.We may see more on UK investments with Epic.A lot going on with experienced people brought in to manage them. I was impressed by bringingin george Gould and putting him on PGW board.He proved his worth with Reid Farmers PGG merger.AS we all know put in a good board ,attract good staff,have a strong balance sheet and the results will come.

[Balance]

What's PGC competitive advantage over the other much larger and stronger banks? What covenants are in place to ensure that the promoters are not using PGC as their own piggy bank such as related party loans and moving their own assets at inflated valued into PGC?

You may want to read the new regulations put in place by the government. It's all there.

[mouse]

You may want to read the new regulations put in place by the government. It's all there.

Very surprised, Balance has, at last, found a company he approves of! Amazing. Of course, I approve of Pike as well, but will hold my 30,000 in Pyne.
To the need for another Bank. I popped in to Kiwi Bank, ASB Bank, SBS Bank, etc, etc. I wanted to borrow $10,000 against my holdings in Pyne, Pike etc to buy more shares. Would give security over the existing shares plus the newly purchased shares. My holding at present is worth around $24,000.
The answer was NO, NO, NO, ETC. Besides raising very serious questions over the lending practices of the banks in question, we only lend on housing loans, and what happens when housing goes into a tailspin?, it emphasizes that there is space in the market for another NZ bank. Those we have here are on thin ice, only lending on housing.
Good luck to Marac.

[macduffy]

Good luck to you, mouse, in getting a loan from "Marac Bank" to buy shares, in the event that Marac do indeed get a banking licence.

Personally, I don't think that your experience indicates that there is "space in the market for another NZ bank." Banks have traditionally been reluctant to lend for that purpose, or for other speculative purposes, for that matter. Apart from the difficulty in valuing the security ( Fortex? Feltex? Allied Farmers? ) there is the problem of risk weighting for capital adequacy purposes. A bank is able to lend against housing with a fraction of the capital required for loans for purchasing equities. That's a prudential requirement, not an individual bank policy matter. More new banks won't make any difference to that.

[Balance]

Very surprised, Balance has, at last, found a company he approves of! Amazing. Of course, I approve of Pike as well, but will hold my 30,000 in Pyne.
To the need for another Bank. I popped in to Kiwi Bank, ASB Bank, SBS Bank, etc, etc. I wanted to borrow $10,000 against my holdings in Pyne, Pike etc to buy more shares. Would give security over the existing shares plus the newly purchased shares. My holding at present is worth around $24,000.
The answer was NO, NO, NO, ETC. Besides raising very serious questions over the lending practices of the banks in question, we only lend on housing loans, and what happens when housing goes into a tailspin?, it emphasizes that there is space in the market for another NZ bank. Those we have here are on thin ice, only lending on housing.
Good luck to Marac.

Go to Forsyth Barr's Leverage Equities and borrow from them based upon the security of your shares. They cost more as you would expect.

This is exactly the kind of business that Marac should get into - with proper risk management & prudential limits. Not stupid lending like the Aussie banks did, lending hundreds of millions to one single individual or to a group of individuals (eg. Babcock &Brown) but well spread over quality shares like Forsyth Barr's Leverage Equities. A few millions in profits each year - nice.

[mouse]

Go to Forsyth Barr's Leverage Equities and borrow from them based upon the security of your shares. They cost more as you would expect.

This is exactly the kind of business that Marac should get into - with proper risk management & prudential limits. Not stupid lending like the Aussie banks did, lending hundreds of millions to one single individual or to a group of individuals (eg. Babcock &Brown) but well spread over quality shares like Forsyth Barr's Leverage Equities. A few millions in profits each year - nice.

The principle of lending, as I understood it, is ability to pay and willingness to pay. So lending say 25% or 30% of a portfolio, with the ability to make a 'cash call' at any time seems to me to be far more secure than lending 90% of the questionable value of a house. What really worries me about our NZ banks is their blinkered view of lending. I remember I tried to get an overdraft from Kiwi Bank some years ago. They would approve $500.00 for my overdraft, no more. My worth was almost $1 million! In three properties. Two were freehold. Total madness from them of course, but you can see the funny side of it. A Marac Bank should clean up in NZ, the banks here need a bit of competition! Instead of getting an overdraft I made sure I never went into the red.