UDC lifts 1H profit 24% on fatter margins, fewer bad debts

UDC lifts 1H profit 24 percent on fatter margins, fewer bad debts

By Paul McBeth

June 24 (BusinessDesk) - UDC Finance, the finance company owned by ANZ Bank New Zealand, lifted first-half profit 24 percent after reaping fatter margins on its interest income and recognising fewer bad debts weighing on its bottom line.

Net profit rose to $23.8 million in the six months ended March 31 from $18.7 million a year earlier, the Wellington-based lender said in a statement. Interest income was flat at $88.7 million, while interest expenses shrank 7.7 percent to $41.9 million. That saw the lender eke out a 7.8 percent gain in net interest income to $46.8 million.

The finance company wrote back an $892,000 gain from credit impairment, from a charge of $1.8 million a year earlier.

The ANZ-backed finance company is one of the few survivors from the sector collapse through the second half of last decade. The lender’s capital ratio of 16.3 percent as at March 31 was up from 15 percent a year earlier, and more than twice the Reserve Bank’s required 8 percent.

The lender lifted net loans to $2.04 billion as at March 31 from $2.02 billion a year earlier, with most of the gains derived from a 14 percent gain in hire purchase contracts to $667.9 million.

The finance company’s debenture stock increased to $1.47 billion as at March 31 from $1.46 billion a year earlier.

UDC says its lending to businesses for vehicles, plant and equipment is a sign that firms are “gearing up for better times, reflecting an encouraging lift in confidence in the economy.”

(BusinessDesk)

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