Sharechat Logo

Motor vehicle lending helps UDC lift annual profit 6%

Wednesday 12th December 2018

Text too small?

The ANZ Bank-owned UDC Finance says an 18 percent increase in lending on motor vehicles helped it lift annual net profit 6 percent.

The finance company’s net profit for the year ended Sept. 30 was $65.3 million and that overall lending rose 11 percent, or $311 million, to $3.22 billion.

Motor vehicle lending accounted for $217 million of the growth while commercial lending grew by $50 million, or 4 percent and equipment dealer lending rose $12 million, or 6 percent.

“This is another strong result for UDC and reflects loan growth across the wide range of industries we work will as well as attention to credit quality and careful cost management,” says UDC chief executive Wayne Percival in a statement.

However, costs grew 7 percent, mainly due to the cost of assessing “the future strategic options for UDC, including a potential initial public offering.”

At the end of October, ANZ announced UDC was no longer for sale.

It was a long time on the block for UDC with ANZ first confirming it was for sale in April 2016, about six months after it sold its Australia-based finance company, Esanda Dealer Finance.

The idea of floating the finance company emerged after ANZ’s plan to sell the business to China-based HNA Group for $660 million was blocked by the Overseas Investment Office in December 2017 because it said it couldn’t work out who owned HNA.

 Percival says the results reflect the strength of the economy, even though growth has slowed in the automotive sector and business confidence has deteriorated.

Earlier this month, the Motor Industry Association reported a 1.4 percent increase in new vehicle registrations in the 11 months ended November.

However, the nation’s largest seller of used cars, Turners Automotive Group, said it had a dreadful October, blaming that on the rising cost of living, particularly petrol prices.

Petrol prices peaked in October – the price of 91 octane peaked at $2.489 a litre on Oct. 5, but has since dropped below $2 in parts of Auckland.

Percival says in the coming year, UDC will have a strong focus on “the high-demand road transport and construction sectors, particularly in the Auckland market.”

UDC’s charges against profit for bad debts rose by $5 million to $10.9 million, although that’s still at historically low levels.

“We have the best and most experienced asset finance team in New Zealand and our focus remains on understanding the needs of our customers and (to) ensure they’re in the best position to take advantage of growth and build long-term resilience and value in their businesses,” Percival says.

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZD headed for 0.6% weekly gain against greenback
PREVIEW: RBNZ tipped to keep cash rate at 1.75%, reiterate next move could be up or down
Sky TV hires Deloitte partner as fill-in CFO
Vector fined $3.6 mln in industry first
SIS Group to partner with Platform 4 Group
Dry weather cutting dairy production, boosting power costs
22nd March 2019 Morning Report
NZ dollar dips back below 69 US cents, focus shifting to RBNZ
Top Energy's geothermal expansion to cut lines charges
MARKET CLOSE: NZ shares rise on Fed restraint, local GDP growth; Auckland Airport slides

IRG See IRG research reports