NZF Group reports turnaround in profit from trading ops
Financial services company NZF Group is reporting a full year net loss of $4.6 million, although the company made a $3.4m profit from trading operations.That trading profit for the year to March compared to a net loss from trading operations of $4.8m the
Financial services company NZF Group is reporting a full year net loss of $4.6 million, although the company made a $3.4m profit from trading operations.
That trading profit for the year to March compared to a net loss from trading operations of $4.8m the previous year.
The company's four key operating segments all showed strong returns to profitability, NZF said today.
But in line with international accounting standards, goodwill impairment testing indicated the carrying amount of goodwill allocated to NZF's 50 percent joint venture investment in Mike Pero Mortgages' owner MPMH exceeded its estimated recoverable amount by nearly $7m.
Managing director John Callaghan said the impairment loss was mainly due to a reassessment of short-term growth rates and projections of profitability.
The reassessment was due to changes in MPMH's KiwiSaver sales and marketing strategy and the prolonged impact of the global financial crisis on the housing market, affecting mortgage broking and insurance-related income streams.
The company said its Home Loans and Property Finance divisions had contributed $4.3m and $1m respectively to the profit from trading operations for the year.
It had also increased its home loans portfolio to $200.5m from $174.1m.
A conservative approached to lending was maintained, with 95.9 percent of all loans and advances secured by first mortgage security as at March 31, NZF said.
It reduced its total gross impaired assets to $11.8m from $16.8m without incurring any significant bad debt write offs over and above amounts assessed in the previous financial year.
Total past due assets were cut to $12.6m from $25.1m.
Last week NZF announced the launch of its first $100m residential mortgage backed securities (RMBS) issue, which it said was the first RMBS issue in this country since late 2007.
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