Pyne Gould’s MARAC signs AA vehicle finance accord

Pyne Gould’s MARAC signs vehicle finance accord with AA

May 22 - Pyne Gould Corp.’s MARAC Finance unit .entered a partnership with the New Zealand Automobile Association under which it will offer vehicle finance to the AA’s 1.2 million customers.

The accord marks the third such auto-related agreement this month for MARAC, the unit that is to spearhead Pyne Gould’s transformation into a bank. This week MARAC announced an assurance scheme with Hyundai Motors, providing cover for up to three months for finance consumers of Hyundai cars who lose their income within the first year of purchase.

Last week MARAC entered into a finance and insurance partnership with Suzuki NZ Ltd. and the finance company also provides credit to customers of Nissan franchises.

The AA will continue to offer car, motorcycle and boat loans to New Zealanders as before, but these will now be provided by MARAC, according to a statement.

MARAC is taking advantage of the exit of rivals in the auto-finance market. In October, GE Capital and GMAC exited from car lending in New Zealand, a market that has struggled with the demise of finance companies that had specialised in auto credit.

The motor industry declined over the last 12 months, with car retail sales shrinking 0.1%, seasonally adjusted, in March from the previous quarter, its third consecutive contraction. This was an improvement from the February’s 3.2% decline and January’s 12.1% slump.

Marac Finance posted a 48% drop in first-half profit to NZ$7 million on impairment charges for bad loans, and a downturn in lending. It was the first lender to sign up to the government’s Deposit Guarantee Scheme, and has retained its investment grade rating of BBB- with Standard & Poor’s.

Shares in Pyne Gould fell 1.4% to NZ$2.12 today and have gained 23% in the past month.

(Businesswire)

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