UDC Finance boosts annual profit as primary sector lending leads growth
UDC Finance, the finance company owned by ANZ Bank New Zealand, boosted annual profit 13 percent on improved margins and growing exposure to the primary sector.
Net profit rose to $43 million in the 12 months ended Sept. 30, from $38 million a year earlier, the Auckland-based lender said in a statement. The finance company lifted net interest income 8.6 percent to $96.3 million in the period, with a gross interest margin of 53.6 percent, up from 49.7 percent a year earlier.
UDC increased its loan book to $2.07 billion as at Sept. 30 from $2.01 billion a year earlier, with its biggest growth in agriculture, forestry and fishing lending to $374.3 million from $350.9 million a year earlier. Transport and storage loans expanded to $387.4 million from $351.1 million, and construction increased to $282.4 million from $248.2 million.
"With rising confidence, firms are increasingly ready to invest in vehicles, plant and equipment to take their business forward," chief executive Tessa Price said. "Our focus remains on our core business of financing these requirements and understanding the needs of our customers."
In October, UDC parent ANZ New Zealand reported a 12 percent increase in annual cash profit to $1.44 billion in the year ended Sept. 30 as staff cuts and fewer bad debts trimmed its costs, offsetting smaller margins caused by increased competition.
UDC paid a dividend of $25 million to its parent, up from $20 million in 2012.
The finance company is one of the few to survive the sector's collapse through the second half of last decade, and increased its capital ratio of 17.1 percent from 15.3 percent a year earlier, more than twice the Reserve Bank's 8 percent minimum.
UDC's debenture stock increased to $1.49 billion as at Sept. 30 from $1.48 billion a year earlier.