Sharechat Logo

ANZ sells UDC Finance to China's HNA Group for $660 million

Wednesday 11th January 2017

Text too small?

ANZ Bank New Zealand has sold UDC Finance to HNA Group for $660 million, marking the Chinese company's first foray into New Zealand. 

The deal is subject to various approvals and is expected to be completed late in the second half of the year, and will deliver a net gain to ANZ of A$100 million, the lender said in a statement. The sale price is $235 million above UDC's net assets, or a price-to-book ratio of 1.6 times. 

"The sale of UDC is consistent with our strategy to simplify the bank and is a good outcome for customers and staff," ANZ New Zealand chief executive David Hisco said in a statement. "HNA is well placed to invest in specialist asset finance products and systems which will help UDC expand further in the future." 

The finance company's ownership has been up in the air for almost a year, attracting suitors including NZX-listed Heartland Bank, though HNA emerged as the front-runner in December. ANZ's review of the ownership triggered Standard & Poor's to downgrade UDC's credit rating to A- from AA- and that question mark made it more difficult for the finance company to attract debenture funding. 

Hainan, China-based HNA, which evolved from a regional airline to a global conglomerate with more than US$90 billion of assets, plans to preserve UDC's existing operations, keeping all staff and customers. 

HNA vice chairman and chief executive Adam Tan said the Auckland-based non-deposit taker provides "significant growth opportunities in Australasia and supports HNA Group's disciplined approach to our core tourism, logistics and financial services businesses." 

UDC holds the highest credit rating among its deposit-taking peers, with Liberty the only other NBDT with an investment grade rating at BBB. UDC is currently offering 3.6 percent for a 12-month term deposit, sitting in the middle of the pack among other finance companies. However, longer duration terms are largely lower than UDC's peers.

The lender's debenture funding shrank to $1.59 billion as at Sept. 30 from $1.74 billion a year earlier, reducing its share of deposits among finance companies to 57 percent from 61 percent a year earlier. At the same time, UDC's loan book expanded 9.6 percent to $2.57 billion, helping generate a record profit of $58.3 million.

BusinessDesk.co.nz



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.
Bookmark and Share   Printable version
Related News

UPDATE: CBL shares drop 11% after earnings fall short of some expectations
MARKET CLOSE: NZ shares fall, Warehouse and Mercury NZ drop while Air NZ gains
NZ dollar gains 0.5% against greenback on week, treading water into weekend
More booze on New Zealand shelves in 2016 as craft beer in demand
Murray Goulburn's milk collection sinks 21% in first half, outpacing Fonterra
CBL annual profit falls 14% as expansion costs weigh
Government releases terms of reference on fuel price study
NZ lamb wool price picks up as fewer wool bales offered at auction
NZME reports little changed FY pro forma net profit despite challenging markets
Vista pays bigger-than-expected maiden dividend as China deal bolsters profit

IRG See IRG research reports