Friday 20th May 2016 |
Text too small? |
ANZ Bank New Zealand's UDC Finance unit reported a 4 percent decline in first-half profit, saying the result reflected tighter lending and deposit margins as a result of increased competition and an increase in its charge for bad debts.
Profit fell to $27.3 million in the six months ended March 31, from $28.4 million a year earlier. Operating income fell 1.9 percent to $59.5 million while operating expenses fell 2.5 percent to $15.8 million.
UDC's AA- credit rating was placed on CreditWatch Negative by Standard & Poor's after ANZ said it was reviewing its continued ownership of the business although no final decision had been made. ANZ New Zealand chief David Hisco told interest.co.nz on May 4 that no sales process was being run and "somebody is stirring the pot."
Market speculation about a sale has included the potential acquisition by Heartland New Zealand or TSB Bank, or a possible initial public offering, trade sale or sale to private equity interests. UDC's announcements today made no mention of the review.
UDC increased total lending by 7 percent $2.48 billion in the first half while customer investments edged up to $1.7 billion from $1.6 billion. Its credit impairment charge rose to $5.7 million from about $4.9 million.
"With the strongest lending growth coming at the end of the half, and margin now stabilising, we're well placed for further growth in the second half," said chief executive Wayne Percival. "We're playing to our strengths by focusing on our core business of asset finance and growing lending across a diverse portfolio while controlling costs."
UDC currently enjoys the same credit rating as its parent bank, which was expected to provide "timely financial support" if needed to the finance company, S&P said last month. The ratings company had previously assigned a stand-alone credit profile (SACP) on UDC of bbb-, or six notches below, and the lowest investment grade rating.
BusinessDesk.co.nz
No comments yet
MPG - Metroglass clarifies media statements by Crescent Capital
VTL - Takeovers Panel orders Empire to reimburse Vital's expenses
March 14th Morning Report
SKT - Sky secures iconic sports rights
RYM - Ryman completes Retail Entitlement Offer
TEM - Transaction in Own Shares
FPH launches F&P Nova™ Nasal mask in NZ and AU
Fonterra announces changes to management team
March 12th Morning Report
WHS FY25 Interim Results teleconference details