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Wrightson Finance, with loan, deposit growth, seeks rating

Monday 7th July 2008

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PGG Wrightson Finance, the finance arm of the rural services company, will seek an investment grade credit rating within the next 18 months, buoyed by growth in loans and deposits.

"We're moving towards that in the next 18 months," Michael Thomas, group general manager financial services, said in an interview with BusinessWire.

The company claims one of the lowest levels of bad debt of any New Zealand financial firm, at just 0.1% of its loan book. Record payments for dairy farmers and high brand recognition in the rural sector have been stoking Wrightson Finance's growth, Thomas said.

"The dairy sector is on fire and reasonable amount of our lending has been in that space," he said. "That will continue for the next 18 months" while demand from sheep and beef farmers has been stable, he said.

Wrightson Finance boosted its loan book by NZ$40 million to NZ$540 million in June. Term deposits rose 27% to NZ$173 million, while on-call money was unchanged at NZ$70 million.

Wrightson Finance merged with PGG Finance in March 2006, with the merger of their parent companies, initially creating a firm with a loan book of NZ$285 million. The value of loans had reached NZ$500 million by May this year.

PGG Wrightson Ltd shares fell 1.6% to NZ$2.51.

By Jonathan Underhill

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