About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Tuesday, October 25th, 10:42PM
Latest Headlines

Geneva set to breach bank covenants

Geneva Finance, the lender that closed its branch network to cut costs, said it is in breach of bank covenants and now expects a full-year loss because of an increase in bad loans.

Thursday, October 16th 2008, 6:38AM

by Jonathan Underhill

The company will take a one-time provision against its so-called old ledger, which is loans to people with lower credit quality, of $6.3 million in the year ending March 31. As a result, it will post a loss of $4.4 million, compared to the $2.7 million envisaged in its capital reconstruction offer document.

Geneva's banker is BOS International, a unit of the UK's HBOS, which is about to have the British government as a shareholder. A spokesman for BOS in New Zealand declined to comment and a spokesman in Perth couldn't immediately be reached.

Borrowers on the old ledger had been squeezed by rising food and petrol prices, eating into their disposable incomes and increasing defaults, Geneva said. At the same time the global credit squeeze had driven up costs and reduced availability of funds.

"Over the last six months there has been an unprecedented upheaval in the world and the New Zealand economy," Geneva said in a statement. "These events and the related credit impact have had a significant impact on the collectability of the old ledger."

Geneva is in talks with BOS International, after breaching covenants of its financing facility as at Sept 30. BOS also is involved with the management buyout of Strategic Finance from Allco Hit, which today said that deal has come off the rails and the parties will resume talks.

Excluding the one-time charge, earnings this year would be $1.9 million, Geneva said.

Geneva posted a $7.9 million loss in the 12 months ended March 31, 2008, reflecting the network closure, restructuring costs associated with its moratorium and charges to adopt IFRS accounting.

Geneva has divided its loan book in two, with the new ledger comprising people with better credit records. As at Sept 30, old ledger loans were $43.7 million, or 43% of the total.

The company has a moratorium on some $138 million of deposits.

« Strategic purchase falters, parties resume talksGuarantee scheme: Who's in »

Special Offers

Commenting is closed



Printable version  


Email to a friend
Today's Best Bank Rates
Heartland Bank 3.00  
Heartland Bank 3.00  
RaboDirect 3.00  
Based on a $50,000 deposit
More Rates »
News Bites
Latest Comments
  • TPD a higher hurdle to pass
    “TPD claims, which are based not only on the medical condition suffered but also inability to work ever again (either at all,...”
    14 hours ago by Steve Wright
  • KiwiSaver risk reward just 2.1%
    “@ Non-aligned Oh, you read the whole thing? I stopped at the 6th word - Mellville......”
    5 days ago by Dirty Harry
  • KiwiSaver risk reward just 2.1%
    “The Milford Acvtive Growth KiwiSaver was not either the best or even second best performing KiwiSaver Fund for the most recent...”
    5 days ago by non-aligned AFA - North Shore
  • Wait continues for FAA detail
    “I am not sure of your background Craig and it's not often i agree with Brent but it is important to know what background...”
    6 days ago by gavin austin adviser business compliance
  • KiwiSaver advice sparks complaints
    “"Banks told Good Returns it was sometimes hard to offer personalized advice within the confines of a QFE structure." So...”
    6 days ago by R1
Subscribe Now

Deposit Rates newsletter

Previous News


Most Commented On
News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%


About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
Site by Web Developer and eyelovedesign.com