South Canterbury At ‘Turning Point’

South Canterbury At ‘Turning Point’

The resuscitation of finance sector heavyweight South Canterbury may have reached a turning point of sorts a few weeks back when operational earnings moved close to break-even, says Warren Head of The Headliner in this week’s issue.

Profit for the March quarter of $4m was offset by one-off expenses on investment losses of $3m, impairment losses of $1.7m and a forex loss of $0.5m but it was a better outcome than the $198.6m net loss for the December half-year.

“These are low level costs compared with those in 2009, with impaired loans being realised at close to carrying cost – well below original value but no longer shedding value.”

Asset realisations have brought in $202m since 1.1.10. The “refound interest of trading banks in financing sound asset propositions has further facilitated the sale and recovery process…”

“A specialist asset management team at work on the non-core and impaired loans sold about 40% from a bad loan book of around $500m, which SCF wants to sell. Bids close this week for the remainder with two possible buyers, one offshore.

“The core business appears to be gaining traction, with a positive net interest margin. The cash position has been helped to $80m by loan repayments and sales of non-core assets.” The Headliner says what concerns financial markets is that SCF still has some $500m of collections to go but reports SCF chief executive Sandy Maier as saying these “are running at a good pace.”

“The company has also been attracting investment under its new debenture offer.”

The full 2,000 word interview is being serialised this week on www.headliner.co.nz

ENDS

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