Lombard Buys United Home Loans From Hanover
Lombard Buys United Home Loans From
Acquisition makes Lombard one of New Zealand’s largest
non-bank home mortgage lenders
21 December 2007 – NZX-listed financial services provider Lombard Group is pleased to announce the acquisition by its subsidiary Lombard Mortgages Limited of United Home Loans Limited from Hanover Group.
The purchase includes United Home Loans’ $230 million mortgage book.
When combined with the business of mortgage facilitator Tasman Mortgage Group, which Lombard purchased in May, it doubles the size of the home mortgage book managed by the Lombard Group to in excess of $500 million. (This excludes the loan book of Lombard Group’s finance subsidiary Lombard Finance & Investments Limited).
Lombard Group CEO Michael Reeves said the acquisition was to the mutual benefit of both companies.
“It provides us with real economies of scale and a strong platform for growth,” Mr Reeves said.
High on the agenda will be a reorganisation of United Home Loans’ marketing.
“We’ve purchased a strong book of mortgages that provide good income, but we’ve also bought a strong brand that we think hasn’t been allowed to flourish as well as it might.
“We believe we can return United to its former prominence as a home loan provider,” Mr Reeves said.
Both the United Home Loans and Tasman brands will continue to exist separately in the market, Tasman as an institutional brand, which receives good support from mortgage brokers, and United Home Loans leveraging on its long history as a home lender to grow both broker and retail channels.
Mr Reeves highlighted that today’s announcement marks the third example this year of Lombard Group diversifying its business beyond property finance, which is undertaken by Lombard Finance & Investments Limited.
He said Lombard Group’s board and executive saw the potential for finance sector instability some time ago and began developing a strategy to optimise opportunities that might arise from any resulting credit squeeze.
“Today’s purchase is evidence of strong planning for Lombard’s future,” Mr Reeves said.
“We are pleased with our progress in developing a range of businesses to see Lombard Group become a truly diversified financial services company.
“From Lombard’s perspective the current environment presents opportunities to grow our existing businesses and continue diversifying.
“We trust shareholders will take confidence in the fact that Lombard Group has been in a position to buy two strong companies and launch a third business in the past six months,” Mr Reeves said.
The terms of the United Home Loans acquisition are confidential; however the transaction is expected to be earnings positive for Lombard Group in its first year.
Today’s news follows the early December announcement that Lombard Finance & Investments recorded a pre-tax profit of $4.64 million for the six months to September 2007, 33% up on the previous corresponding period.