CBS, Southern Cross join Govt guarantee scheme

Canterbury Building Society and Southern Cross Building Society are the latest additions to the Government's extended retail deposit guarantee, taking their investors' protection out to the end of next year.

The building societies take the number of financiers guaranteed until the end of 2011 to eight, and join the Wairarapa Building Society, Marac Finance, South Canterbury Finance, Equitable Mortgages, PGG Wrightson Finance and F&P Finance.

Under the terms of the guarantee, deposit takers have to pay a premium to the Government, dependent on their credit rating, which will allow up to $250,000 of investors' money to be repaid if the financier defaults.

The extended scheme was introduced by Finance Minister Bill English last year, and places a bigger burden on finance companies wanting to tap the scheme.

Shares in Canterbury Building Society, the only listed building society, were unchanged at $2.80 this morning. The shares trade infrequently and have declined 8.2 per cent this year.