A review of things you need to know before you go home on Tuesday; Heartland trims some rates, Auckland auctions tough, tax changes, social bonds launched; eyes on dairy auction, Heartland profit jumps

Here are the key things you need to know before you leave work today.

MORTGAGE RATE CHANGES
No rate changes to report today.

DEPOSIT RATE CHANGES
Heartland Bank has reduced rates on a range of savings accounts, but not their market leading Direct Call account which stays at 3.00%. However, their Business Call account rate has been reduced by -25 bps to 2.75%, and the Heartland Saver, and Heartland Everyday accounts have taken some substantial reductions, some up to -50 bps.

AUCTION ISSUES
Dominant Auckland realtor Barfoot & Thompson is finding residential properties in south Auckland are the most difficult to sell at auction - and auction results are mixed elsewhere in the region.

COLLIDING STRATEGIES
Standard & Poors warns there will be unwelcome impacts as banks tighten commercial property lending standards at the same time as the Auckland Unitary Plan opens increased building options. It sees a potential for renewed upward pressure on house prices.

ENDING A TAX INJUSTICE
When an insured business asset is destroyed (such as in an earthquake) it is deemed to be sold and this results in depreciation recovery for the asset owner - an unexpected windfall. That windfall is taxable, which means that those businesses trying to get back on their feet would face an unexpected tax bill. However, the Government has changed the tax rules so that businesses in the upper South Island and Greater Wellington areas hit by last year’s earthquake and aftershocks will be able to replace assets lost in the earthquake without immediately incurring a tax bill. The new rules provide roll-over relief for depreciation recovery.

INNOVATION?
Starting small, the Government has launched its first social bond after raising $1.5 mln from four investors. It will fund programs to get South Aucklanders with medium-level mental health conditions back into work. Bond holders get a risk margin if the project gets people into work and retains them in work over a five year period. It is an area the Government itself has a poor record in.

HEARTLAND BANK INCREASES PROFIT
Heartland Bank posted a +14% rise in interim net profit after tax to $29.1 million. The increase was attributed to growth in receivables across the bank's household, business and rural divisions. Return on equity rose to 11.6% from 11.1%, with Heartland paying 3.5c per share interim dividend. Annual profit is forecast to be at the upper end of Heartland's $57 mln to $60 mln forecast range.

FINALLY, SOME INSURANCE PAYOUT
The liquidators of Western Pacific Insurance which failed in April 2011 are making their first payment to their Canterbury policy holders who are mainly holders of commercial buildings. The initial payout is 35% of the value of accepted claims for the September 2010 Christchurch earthquake and 20% for the February 2011 earthquake. The courts have determined the Canterbury policy holders have priority to receive Western Pacific’s reinsurance proceeds. As a result, other creditors of Western Pacific are unlikely to receive payment of amounts due to them.

DAIRY FARMERS HOLD THEIR BREATH
Tonight's dairy auction will be touch-n-go. The latest dairy derivatives trading suggests WMP will show lower prices by about -2.5% - but the traders don't have much conviction because todays trades saw rises and a closing of the bets for a fall.

WHOLESALE RATES SLIP
Wholesale rates are down -1 bp for terms three to ten years. Other rates are unchanged. Today's 90 day bank bill rate is also -1 bp lower at 2.02%.

NZ DOLLAR SLIPS MARGINALLY
The NZD is slightly lower today, now at 71.6 USc. On the cross rates we are also slightly lower at 93.4 AUc, and holding at 67.7 euro cents. The TWI-5 index is now at 77.1. Check our real-time charts here.

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