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Pyne Gould's MARAC gains admission to government's extended Retail Deposit Guarantee Scheme:

Friday 12th March 2010

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MARAC Finance, the arm of Pyne Gould Corp. with ambitions to become a bank, has been accepted under the government’s extended Retail Deposit Guarantee Scheme through to the end of December 2011.

It is the first approved institution to gain the extension beyond October 21 this year, according to the Treasury’s website.

“Whilst the extended Crown Guarantee will provide investors with comfort, MARAC is confident it has the strength to stand on its own,” said chief executive Jeff Greenslade. Investors also have the choice of investing in non-guaranteed deposits.

The extended scheme has a number of changes that will assist in the transition to its winding down. The most significant is a reduction in the maximum amount covered by the guarantee to $250,000 per eligible investor for Non-Bank Deposit Takers.

MARAC’s first-half results show pretax earnings of $8.2 million. Parent Pyne Gould invested $35 million in new capital, didn’t require it to pay a dividend, and arranged the sale of $175 million of property loans at face value to another PGC subsidiary. This resulted in MARAC’s total equity increasing to $197 million from $153 million.

“The company remains focused on securing a banking licence,” Greenslade said. “This will require returning to a consistent track record of earnings, regaining an investment grade credit rating and building further scale in the business.”


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