Monday 27th May 2019 |
Text too small? |
Motor Trade Finance reported a 2.6 percent decline in first-half profit as the auto lender wrote less business with Turners Automotive Group.
Net profit fell to $4.2 million in the six months ended March 31, from $4.3 million a year earlier. MTF wrote $253 million of new loans in the half, down from $318.3 million a year earlier.
MTF said $49.3 million of the reduced lending was due to less business going through Turners. A non-recourse loan offered with Turners' Oxford Finance was discontinued after tighter lending criteria sapped demand for the product. Turners also brought more business in-house, diverting lending that had previously been done by MTF.
The auto lender's receivables still grew to $681.1 million as at March 31 from $651.7 million a year earlier. Its interest income increased 4.9 percent to $44.7 million, while commission payments rose 7.1 percent to $21.1 million.
The company said it has sufficient capacity to fund forecast growth with $52.8 million of its securitisation facilities undrawn at March 31. From April 15, its $250 million warehouse funding facility was increased to $300 million.
MTF is seeking to boost lending in tandem with Trade Me Group after a pilot project introduced a finance option on the website's listings and generated $1.5 million of new loans through to the end of March.
"We have made progress on replacing lost non-recourse business through the partnership with Trade Me, and more is required," the company said.
"We will continue to balance our focus on retaining our share of the market while looking to the horizon and positioning MTF Finance so it can adapt quickly in a rapidly changing market."
MTF has been a beneficiary of successive years of record new vehicle sales as a strong currency kept imported cars cheap, economic growth generated new jobs, and low interest rates made it easier to finance big-ticket items.
It warned that "unprecedented" growth is now in decline, citing the slowing global economy, weaker domestic spending, and dwindling business confidence.
MTF noted the extra scrutiny lenders are under since Australia's royal commission and New Zealand's proposed changes to consumer finance law.
"While it is too early to identify the impact on us as a business, and on our customers, we are continuously monitoring activity to ensure we maintain our commitment to responsible lending," it said.
(BusinessDesk)
No comments yet
Second St John withdrawal of labour takes effect tomorrow with further strikes likely
Sanford Appoints Independent Director
CRP ADVISES CLOSURE OF SHARE OFFER TO EXISTING INVESTOR
Devon Funds Morning Note - 14 August 2024
OCR 5.25% - Monetary restraint tempered as inflation converges on target
Consumers still need due diligence as new deposit takers emerge.
Woolworths strike: staff asked to dress up in Disney costumes for a week on their own dollar
Turners Invests in Quashed Online Insurance Platform
PGW Reports on Challenging Year
Arvida Announces Executive Team Changes