UDC profit surges 570% as bad loans halve
By Paul McBeth
Dec. 20 (BusinessDesk) – UDC Finance Ltd., the non-bank lender owned by ANZ National Bank, posted a 570% jump in full-year profit, reflecting a reduction in provisioning for bad loans.
The Auckland-based firm had a net profit of $18.2 million in the year ended Sept. 30, compared to $2.7 million a year earlier. Its provision for bad debts fell to $17.3 million from $35.5 million.
“UDC will continue to stick to its core business of plant, equipment and motor vehicle finance to help New Zealand grow,” chief executive Chris Cowell said in a statement. “We will continue to support our customers and as the economy starts to grow and businesses begin to invest again we are ready to provide the finance they need.”
ANZ National, UDC’s parent, reported a similar surge in net profit for the year after it cut its provisioning for bad debt by half, though doubled its past-due loans.
UDC grew its loan book 7.6% to $1.97 billion over the period, though borrowings increased to $1.83 billion as at Sept. 30 from $1.58 billion a year earlier. Since then, the finance company repaid a further $150 million of its facility with ANZ.
Interest income dropped 11% to $175.9 million, with just $1.7 million of that coming from ANZ. Interest payments sank 24% to $98.6 million, with fees paid to the parent rising to $29.9 million from $19 million a year ago.