Investor Newsletter - March 2012

Welcome to our March 2012 General Finance quarterly newsletter. We appreciate your support. The purpose of this newsletter is to keep you informed about the company and various financial matters that may interest you.

State of the Residential Property Markets

Over the past few months, activity has been returning to the residential property markets. The Auckland market has now returned to its pre global financial crisis level of 2007. The other property markets across the country are still below their 2007 levels but generally activity is returning to these markets and prices are beginning to firm. Some regions, such as Taranaki, Wellington and Dunedin have seen considerable activity. This is important for a company such as ours, as we only lend money on residential property. A stronger residential property market means our security position is enhanced and puts the company and its borrowers in a better financial position.

Interest Rates

On 8 March, the Reserve Bank reviewed their wholesale interest rate and left it unchanged at 2.5%. What was said in their statement is important. The Governor is saying that there is little inflation risk for the country at the moment, the domestic economy is showing some small signs of recovering and our relatively high exchange rates will dampen any demands to increase our wholesale rates in the short term (i.e. the next twelve months). Interest rates are unlikely to alter at all this year, which does give investors, such as you, a little bit more certainty.

A New Director

Last year we appointed two new independent directors, Peter Anderson, who is our chairman and Jon Olsen. Sadly Jon passed away last October. Jon will be greatly missed, as he had extensive business and property experience. We have appointed a new director - John Hiddleston, who comes to us with over forty years banking experience, mostly with the Bank of New Zealand and Trustbank. We welcome John to our team with his considerable trading bank experience, both here and overseas. He will be an asset to the company.

Next Interest Payment

Our next quarterly interest payment will be made on the evening of Friday 30 March 2012. Direct credits will be processed that evening, with cheques (if applicable) and paperwork being forwarded during the week.

If you have any questions about your investment please do not hesitate to contact William Cairns on 09 526 7801 or by email to wcairns@general.co.nz. Our website is www.general.co.nz.

If you want to invest more funds, you can obtain an investment statement and application form from our securities registrar. Their number is 0800 500 602.

Your continued support is noted and appreciated.